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Niina Nygren
Outsourcing Customer Service -A Conceptual Step-By-Step Process
Helsinki Metropolia University of Applied Sciences
Master’s Degree
Industrial Management
Master’s Thesis
17 June 2016
25 April 2015
2
This has been one of the hardest years I have had, but at the same time, one of the
most rewarding. I would like to thank my instructors Dr. Thomas Rohweder and Dr.
Satu Teerikangas for their unfailing faith in me. I would also like to extend my thanks to
Zinaida Grabovskaia and Sonja Holappa for their support during this project.
I would like to thank Nesenta for allowing me to use their company as an example for
this thesis and continuous support during this process. It has been wonderful working
in collaboration with you.
To my friends and family, thank you for your patience, sorry that I haven’t been as
available to you as I would have liked, but I know you all have understood, because
you know how important this has been for me.
Finally this year has been hard work, but the wonderful classmates who have shared
this adventure with me, have made it worthwhile. Thank you for being you, you are all
exceptional people and it has truly been a pleasure getting to know you.
9th of June 2016
Niina Nygren
3
Author Title Number of Pages Date
Niina Nygren Outsourcing Customer Service- — A Conceptual Step-by-Step Process 63 pages + 8 appendices 9 June 2016 Degree Master Of Engineering
Degree Programme Industrial Management
Instructor(s)
Thomas Rohweder DSc (Econ), Principal Lecturer Satu Teerikangas DSc (Tech), Head of Master’s Program in IM
This study concerns building a conceptual step-by-step process for a customer service out-sourcing project. The case company provides its clients outsourced customer services. They have created a service solution that combines technology and resources needed for out-sourcing customer service. To complement this solution, this study provides a conceptual process for implementing the service to the outsourced service supplier. Data for the study is collected from relevant literature, and by one-on-one interviews. Based on the findings of current literature on outsourcing, elements needed for a successful out-sourcing project are listed. The subsequent Current State Analysis performed on the case project shows there are some challenges in the knowledge transfer of the service. This is researched in more detail to improve the process in future outsourcing projects. Based on the findings of the CSA and Conceptual Framework, the process proposal is built in collaboration with the case company key stakeholders and validated by the CEO of the company. Finally suggestions on the new process implementation to the company is discussed and suggestions given for further development of the knowledge transfer process.
Keywords Outsourcing, customer service, knowledge transfer
Contents
Preface
Abstract
Table of Contents
1 Introduction 1
1.1 Key Concepts 1
1.2 Case Company Background 2
1.3 Business Challenge 3
1.4 Objective and Scope 3
2 Method and Material 4
2.1 Research Approach 4
2.2 Research Design 5
2.3 Data Collection and Analysis 7
2.4 Validity and Reliability Plan 11
Triangulation 11
Validity and Reliability 12
3 Preliminary Structure for Outsourcing 14
3.1 Reliability of the Sources 14
3.2 Strategic Outsourcing 14
3.3 Succesful Outsourcing 17
3.3.1 The Scope of Outsourcing 20
3.3.2 Choosing the right partner 21
3.3.3 Defining Contract 22
3.3.5 Human Resources 23
3.3.6 Communication and Cross-functional processes 23
3.3.7 Technology 24
3.3.8 Follow up 25
3.4 Conceptual framework from literature 26
4 Case Outsourcing Project 28
4.1 The Data Collection 28
4.2 The Outsourcing Case Project 28
4.2.1 The Scope of Outsourcing 30
4.2.2 Choosing the Right Partner 31
4.2.3 Defining Contract 31
4.2.4. Human Resources 33
4.2.5 Communication and Collaboration 34
4.2.6 Technology 35
4.2.7 Follow-Up 37
4.3 Key Findings from the Current State Analysis (Data Collection 1) 39
5 Knowledge Transfer 41
5.1 Knowledge transfer and learning organization 41
5.2 Tools for Knowledge Transfer 42
5.3 Improved Conseptual Framework 44
6 Building Proposal for the Case Company 46
6.1 Building Proposal 46
6.2 Proposed Steps 46
6.3 Proposal Draft 51
6.4 Summary of Building the Proposal 53
7 Validation of the Proposal 54
7.1 Feedback on the Proposal 54
7.2 Final Proposal 55
7.3 Recommendations 57
8 Discussion and Conclusions 58
8.1 Summary 58
8.2 Practical/ Managerial Implications 59
8.3 Evaluation of the Thesis 59
8.3.1 Outcome vs Objective 60
8.3.2 Reliability and Validity 60
8.4 Closing Words 61
References 62
Appendices
Appendix 1. Interview 1 field notes
Appendix 2. Interview 2 field notes
Appendix 3. Interview 3 field notes
Appendix 4. Interview 4 field notes
Appendix 5. Interview 5 field notes
Appendix 6. Interview 6 field notes
Appendix 7. Brainstorming notes 1
Appendix 8. Brainstorming notes 2
1
1 Introduction
Outsourcing customer service is complicated, as customer service is for most compa-
nies the only direct contact with their customers, and therefore reflects directly to the
customer satisfaction. It is however seen as an easy solution for reducing the person-
nel costs of companies and thus improving their financial results. Unfortunately there
are examples of outsourcing gone wrong and companies ending up bringing the ser-
vice back in-house from the outsourced partner.
The case company has created an all-inclusive customer service solution that incorpo-
rates technical platform for the service and personnel resources needed. To make the
transition easier the company wishes to have a process plan to help in the transition.
Therefore this study focuses on finding best practices in successful outsourcing pro-
cesses, which the case company can utilize in their future outsourcing projects. This
study aims to create a conceptual step-by-step process for outsourcing medium sized
customer service from in-house to outsourced supplier.
1.1 Key Concepts
This study is about customer service outsourcing. The term is used in this study to
describe transferring a company’s customer service processes, including human re-
sources issues and back office operations to an outsourced service provider. For the
purposes of this study, customer service is limited to describing services that are not
conducted face to face, that is to say emails, calls, letters and all back office duties
related to the customer contacts.
Offshoring is a term used for outsourcing that is done in another country. Offshoring
brings different features to the outsourcing process due to cultural and legislative and
taxations issues; therefore offshoring will be excluded from the scope of this study.
Contact centers provide outsourced customer services to their clients. The tasks can be
very varied and single customer contacts are generally speaking in intervals so that a
contact center benefits from having several partners where the contact peaks (high
volume of contacts) do not overlap.
Contact center measurements or key performance indicators KPI for short are men-
tioned during the study. Some of the KPIs include service level or SLA, which is a per-
centage of calls answered in the agreed timeframe, for example 80% of calls answered
in one minute’s time. Average call time/ handling time is the time it takes to finish one
2
contact. Average wait time or Average queue time is the time customer has to wait to
get a response. Some contact centers also measure first contact resolution, which tells
the percentage of the contacts solved during the first contact.
1.2 Case Company Background
The case company Nesenta was established in 2002 as a result of an extensive market
research carried out with the help of Finnish Innovation Fund Sitra. The research goal
was to study the outsourcing potential of different geographical locations in Finland.
The focus areas of the research were education provided in the area and personnel
resources available. Based on this research, Nesenta was established.
As the companies’ services are not limited by their location, their contact centers for
example are located in Kuhmo and Lieksa Northeast Finland and Jorvas, Kirkkonummi
in Southern Finland. Since then they have constantly expanded their innovative service
production platform based on the optimal balance of new technology and the skills of
the personnel. One of Nesenta’s strengths is that the company has a very low hierar-
chy that enables agility and also gives individual teams a great deal of influence. As
Figure 1 showing the company structure indicates, all teams report directly to the CEO.
Figure 1 Case Company Structure
Nesenta is a contact center, where the outsourced customer service contacts are han-
dled. They combine contact center knowhow, skilled people and technology. They fo-
cus on three customer service sectors: contact center services, sales and customer
service performance research, and resource development. The company has a strong
commitment to their customer’s values and products. This creates a solid foundation
for efficient outsourcing. Co-operation is always based on knowing the customer well
3
and combining optimal skills and the most innovative technology to suit their custom-
ers’ needs.
1.3 Business Challenge
Nesenta has provided outsourced customer services for many years. Usually each pro-
ject is tailored directly to suit the customer’s needs. Recently, Nesenta has developed
an all-inclusive customer service solution for their future customers. This solution in-
cludes service systems, implementation and resources for the service. The solution
combines their key expertise areas of quality customer service provider and innovative
technological solution for a service system. To get the full benefit from this solution,
the company would like to get new customers from medium and small sized compa-
nies’ customer services. These potential customer companies mainly have these ser-
vices in-house and a project of outsourcing seems daunting as the outsourcing compa-
ny might see it just as a long and overwhelming project. They might also lack the
funds to pay for a consultant to help them with the outsourcing project.
1.4 Objective and Outcome
The objective of this thesis is to create a conceptual step-by-step process
that can be used as a tool when implementing future outsourcing projects.
The goal is to locate the key elements of the outsourcing process, to document each
step and describe some of the possible challenges related to each step. The purpose of
the study is to provide a logical process to be used as a tool for future outsourcing
projects.
The structure of this thesis is as follows; first the research method and sources for
primary data is introduced. Then this study explores current research on successful
outsourcing. In section four, the case project is described step-by step to find out the
projects strengths and challenges. In section five, the challenges found in the case
project are resolved by further consulting literature relevant to the challenges. In sec-
tion six, the process plan is created in collaboration with the key stakeholders of the
outsourcing supplier company. In section seven the process is introduced to Nesenta
CEO and the validity and reliability of the study is discussed. Finally in conclusions,
suggestions are given on how to implement the conceptual process plan to outsourcing
supplier companies in future projects.
4
2 Method and Material
In this section, the choice for the research approach is described and the research pro-
cess introduced. Then the study moves to the process of gathering the data and ex-
plaining its validity and reliability to this field of study.
2.1 Research Approach
The method used is a single case study. Case study is very popular as a research
method, one of the reasons being that “it is one of the best (if not the best) of the
bridges from rich qualitative evidence to mainstream deductive research” (Eisenhart
et.al 2007:25). As the study also relies on best practice data from literature in this
study the use of the case project is an example of an outsourcing project and the
study will aim to find process similarities and differences during analysis (Eisenhart
et.al 2007). This study focuses on a single past outsourcing case and compares the
process to that found in current outsourcing literature.
Like any other research method, case study is not without faults. According to Yin the
biggest issue most case study researches face is their lack of rigor (Yin 2009). To avoid
this, the researchers
should explain and show how you are devoting yourself to following a rigorous methodological path. The path begins with a thorough literary review and the careful and thoughtful posing of research question or ob-jectives. Equally important will be a dedication to formal and explicit pro-cedures when doing your research (Yin 2009).
To achieve these requirements, a logical research plan is followed in this study. Firstly,
literature relevant to the case project is introduced and based on the findings interview
questions that address the case project are created. In all phases, this study aims to
look at the case project objectively and to document the research phase methodically.
The structure this case study follows is such that first the literature is reviewed which
then functions as a structure for the case project analysis. This is followed by further
research on the challenges identified during the case analysis. Further, the literature
and data collected through the interviews then function as a basis for building the pro-
cess plan.
5
Qualitative analysis is used as the research method because the interviews will provide
a large amount of rich data on the project to get an overview of the studied outsourc-
ing project (Eisenhart et.al 2007). To have objective and comprehensive information
on the project, 6 people from different positions in both outsourcing supplier company
as well as the client company were chosen for the interviews. In the next subsection
the research design is described and its phases introduced step-by step to give a clear
view on what is done during this study.
2.2 Research Design
The research design is structured so that it begins with looking into current research
on successful outsourcing, and then moving to the Current State Analysis by interview-
ing the case company on one of their outsourcing project. Process strengths and chal-
lenges are established during the interviews and they will be the further consulted
from relevant literature. With information gathered from the previous stages, a step-
by-step plan for the future projects is built.
Figure 2 Research Design
6
Figure 2 shows the research design, on the left are the date sources for this study, in
the middle the steps that will be done to meet the final objective and on the right, the
outcome of each step, end result being the final conceptual process.
Preliminary literature and initial Conceptual Framework
In section two, recent studies on outsourcing processes are introduced to define the
key elements of a successful outsourcing project. These elements are used to give a
preliminary structure for the interviews. Valid interview questions are formed for the
client company’s and supplier company’s key persons.
Current state Analysis- Case Project
This study receives its primary data from one case project. In this section the process
of the case project is documented. Data collection for this study is conducted in three
stages. Firstly interviews are done to collect primary data on the case project. “Inter-
views are highly efficient way to gather rich, empirical data, especially when the phe-
nomenon of interest is highly episodic and infrequent”(Eisenhart et.al. 2007). The in-
terviewees have been selected so that it will give a clear picture of the case project
with several different points of views, so that the results will get enough objectivity.
After finishing with the interviews, the interview data is analyzed and the study focuses
on any challenges found in the current process.
Compiling final Conceptual Framework
During the case project documentation some elements are different from the initial
Conceptual Framework and in section five additional researches are done on a custom-
er service outsourcing process with a particular focus on resolving any challenges and
gaps found in the current process. At the end of section five a final Conceptual Frame-
work is introduced. This framework is then used as a basis for creating the process
proposal.
Building Process Proposal
In section six based on the literature, case project findings and additional research
with the focus on process gaps and challenges the proposal for the future conceptual
process is created in collaboration with the key stakeholders of the supplier company.
One-on-one brainstorming sessions are conducted with the outsourcing supplier ITC-
7
manager and HR manager to create an updated step-by-step process for their future
outsourcing projects.
Process validation
When the step-by-step plan is finished and documented, it is taken to the supplier
company CEO for validation. He then determines if the description of the project is
accurate and if it is relevant to their business. With the help of the comments received
from the CEO of the case company during validation, a final conceptual process is con-
structed and its implementation plan discussed.
Final Conceptual Process Plan
With the help of the comments received during validation, a final conceptual process is
constructed and its implementation plan discussed.
This section described the research process in general. The next section focuses on the
data collection of this study.
2.3 Data Collection and Analysis
The data collection was conducted in three phases. Firstly, interviews concerning the
case outsourcing project were held, followed by brainstorming sessions with key
stakeholders on the supplier company to capture their views on what the new process
should look like if the challenges of the current process are taken into account. Finally
after the plan was constructed with the company key stakeholders, it was presented to
the supplier company CEO to obtain his comments and critique regarding the process.
Table 1 shows the data collection of this study.
Data Data Source Data type Analysis
Data 1 Company Documentation Process descriptions, Company structure Section 4
Data 1 Key Case project stakeholders Interviews Section 4
Data 2 Key Case project stakeholders 1-on-1 brainstorming sessions Section 5
Data 3 CEO of Case Company stake-holders 1-on-1 discussion Section 6
Table 1-Data Collection
8
Data 1 collection
As described in Table 1, data from the case company’s past outsourcing project was
gathered by conducting interviews with the outsourcing client company manager and
other stakeholders relevant to the project to get an overall picture of how the project
was conducted.
The interviewees were selected so that an overall description of the project would be
described objectively and with enough detail to have a clear view of the current out-
sourcing process. To establish triangulation criteria the interviewees were selected
from both companies and different levels in the organization to get an objective view
of the execution of the project. All interviews were conducted during February and
March 2016.
The first interviewee was the client company Co-owner, as he had been part of the
project since the beginning. Then the ITC and HR manager of the service supplier
company were interviewed, as their expertise is needed in all outsourcing projects.
Then the supplier company CEO was interviewed. Also one of the customer service
agents and the team leader currently taking the calls were interviewed to find out if
they felt that the transition has given them enough tools to do their work well.
The descriptions of the interviews are collected into table 2. It shows the main topics
of each interview, duration and time when the interview was held.
Data 1 collection Date Duration Content Interviewee 1- Co-Owner of the Client
company
19.2.2016 23 minutes Reasons for outsourcing, find-ing right partner, defining contract, service system
Interviewee 2-HR person
2.3.2016 43 minutes Recruiting, training, team leader career path
Interviewee 3- ITC Manager
4.3.2016 28 minutes Infrastructure, Reporting, firewalls, call-routing
Interviewee 4-CEO of outsourcing sup-
plier
23.3.2016 42 minutes New customer acquisition, contract negotiations, defining
KPIs
Interviewee 5- Customer service
agent
30.3.2016 21 minutes Answering calls, customer service system, training, co-
operation, KPIs, Interviewee 6-Team
Leader 31.3.2016 39 minutes Answering calls, customer
service system, training, co-operation, KPIs
Table 2 Interview topics
9
As the table 2 shows the questions were aimed to determine the course of the case
outsourcing process. Firstly the aim was to find out from the client company owner
why they decided to outsource their customer service, what kind of criteria they had
for their future partner, how the contract negotiations were conducted and if they are
satisfied with their decision to outsource. The HR manager was asked about the HR
involvement in this new customer implementation process, how the service team was
selected and how they participated in training. The next interviewee was the IT man-
ager of the supplier company. He was asked to share his point of view on the imple-
mentation process with regard to the case project and in general. The fourth inter-
viewee was the CEO of the supplier company. Because he is the one who has been
involved in the project since the offer tender phase, he is in the best position to de-
scribe how the outsourcing company became their client and how the agreement ne-
gotiations were conducted. During the interviews of the supplier key stakeholders they
were asked about ideas for improving their own process, in particular what they feel
might ensure a smooth implementation plan. Finally the team that currently taking the
client company calls was interviewed. They were asked about their training and if they
feel they have had sufficient amount of information to successfully respond to custom-
er calls, or if they feel that something could be improved in the training or in the cur-
rent service process.
Having multiple interviewees from different phases of the project should provide a real-
istic overview of how the project was executed. Also this should reduce bias concern-
ing interviews as a research method. “The challenge of interview data is best mitigated
by data collection approach that limits bias. A key approach is using numerous and
highly knowledgeable informants who view the focal phenomenon from different per-
spectives.” (Eisenhart et.al. 2007). The interviews were written into field notes and
then verified by the stakeholders to ensure the responses of the interviews were accu-
rately documented. The data analysis for this study was done by using Pattern
Matching-logic (Yin 2009). The aim was to compare current research on successful
outsourcing projects to the case project and find similarities between their structures.
Data 2 Collection
Based on the findings an improved structure of the outsourcing plan is created in col-
laboration with key stakeholders of the company in 1-on-1 brainstorming sessions.
Data 2 is gathered from these sessions with the outsourcing supplier IT manager and
10
HR manager to create an updated step-by-step plan for the company’s future out-
sourcing projects. Table 3 shows the data 2 collection which is the building of the pre-
liminary proposal.
Data 2 collection date Topics discussed
Initial improvement Ideas with the HR manager 2.3.2016
Continuous development, Career Path for team leaders
Initial improvement Ideas with the IT manager 4.3.2016
Start-up meeting, IT involvement from the start
Brainstorming on the topics HR 14.4.2016 HR task lists in different phases of out-sourcing process
Brainstorming on the topics IT 20.4.2016 IT task list in different phases of out-sourcing process
Table 3 Data 2 Collection
The aim is to recognize separate tasks in different phases of the outsourcing project,
particularly from the HR and IT points of view. The important findings from this phase
was the importance on sharing knowledge in the beginning of the project, solution that
came up in the discussions with the IT-manager, was that the start-up meeting would
include all parties vital to the project success. HR-manager highlighted the importance
on continuous learning and career path model for future team leaders.
Data 3 collection
The validation process was done with the company CEO as he is the person who even-
tually needs to approve all process changes in the organization. The process plan is
discussed, to get his opinion and suggestions before finalizing the plan. Figure 2 shows
the validation process.
11
Figure 3 – Validation Process
The Figure 3 shows the course of the validation process. First the CEO received the
initial process plan, and ideas for tasks to be executed in each step to get his opinion
and suggestions before finalizing the plan. Then the plan was discussed in detail, going
through each step of the proposed plan. Finally all ideas and comments were carefully
considered and the plan was modified accordingly.
This section described the data collection. The next section focuses on the validity and
reliability plan for the study.
2.4 Validity and Reliability Plan
During the study the validity and the reliability needs to be taken into consideration.
There are several different methods for doing this, but below are listed only the ones
relevant to this study.
Triangulation
Triangulation is a process of making sure that the point of view reflected in the inter-
views is objective enough for the purpose of this case study. The interviewees are se-
lected so that several different points of views on the outsourcing case would surface.
This should confirm that the data collected is both objective and valid for the purpose
of this study. The interviewees’ background is documented on the field notes so that
their level of expertise on this case project is validated.
12
Validity and Reliability
When measuring validity there are three different points of views to consider; con-
struct validity, internal validity and External validity. Construct validity can be estab-
lished according to Yin, as follows;
1. define (…)the change in terms of specific concepts (and relate them to the original objectives of the study and
2. Identify operational measures that match the concepts (preferably citing published studies to make the same matches). (Yin 2009)
The key concepts of this study have already been specified and preliminary data will be
combined with published studies on the subject to establish construct validity.
Internal validity is not that relevant to this study as we are not measuring the success
of the project, only documenting it. More relevant areas are in external validity and
reliability and research bias.
External Validity needs to be considered, as the result of this study is supposed to be a
generalization on an outsourcing process. According to Yin, the problem with single
case studies usually is knowing whether the findings can be generalizable beyond the
immediate case study (Yin 2009). All the findings in preliminary data will be supported
or contradicted by literature in sections three and five, so although the study is focused
only on a single case, the basis for generalization will become evident with the support
of established studies. According to Yin “it is true that one case alone cannot give a
broad view or describe all scenarios possible but it has its merits as an example.” (Yin
2009)
Reliability, as Yin describes it, can be established by determining whether a later inves-
tigator would arrive at the same findings and conclusions if they followed the same
procedure (Yin 2009). The process of this study is documented meticulously in order
to give an objective and complete look on the case project so if the same procedure
was follow by another investigator, they should arrive to the same results.
This section dealt with the structure of the study. The methods that are used during
this study have been established. The grounding why these particular methods have
been chosen for this study was clarified. The credibility of future findings is supported
by introducing a validity and reliability plan. The next section focuses on compiling a
13
preliminary structure from literature, which is then utilized to construct the interview
questions.
This section introduced the case company, research plan and data collection of this
study. Also the validity and reliability plan was described. The next section focuses on
creating a Conceptual Framework for the outsourcing process with the help of current
literature.
14
3 Preliminary Structure for Outsourcing
The previous section discussed the structure of this study. In this section some studies
on strategic outsourcing and elements in common for successful outsourcing processes
are introduced.
3.1 Reliability of the Sources
There is a large amount of research done on outsourcing. For this study, an extensive
research was done through different theoretical articles and books related to customer
service outsourcing, but for the Conceptual Framework of this study only a selected
few key researches were chosen. These particular researches were chosen as they
provided a comprehensive view of primary data collected from companies that have
done outsourcing.
The research material chosen for this Thesis included the Quinn and Hilmer study on
strategic outsourcing, Aron and Singh’s study on risks related to outsourcing and Elmu-
ti’s and Barthelémy’s comprehensive studies on successful outsourcing. Elmuti’s study
on outsourcing consists of 1500 questionnaires randomly distributed to companies rep-
resenting different industries. He got 402 responses and his study is based on them
(Elmuti 2003:35). Barthélemy did a study on an in-depth analysis of 91 outsourcing
efforts carried out in European and North American companies. His data was mainly
collected through face-to-face interviews and detailed questionnaires. Both Elmuti’s
and Barthélemy’s studies are used as a basis for defining the key elements of success-
ful outsourcing.
3.2 Strategic Outsourcing
When a company begins to consider outsourcing their customer service, there can be
several for reasons for doing so. Quinn and Hilmer have conducted a study on strategic
outsourcing where they conclude what benefits can be obtained if a company decides
to outsource strategically. The list four important factors to consider:
15
*Maximize returns on internal resources *Focus on companies core competencies *Full utilization of external suppliers’ investments, innovations, and spe-cialized professional capabilities *Joint strategy decreases risks, shortens cycle times, lowers investments, and creates better responsiveness to customer needs. (Quinn et.al. 1994)
According to Quinn and Hilmer, the benefits of outsourcing lie in better use of compa-
ny’s own resources available. Focusing on core competencies gives the company an
edge on a highly competitive market. They also conclude that in order to maximize the
benefits of outsourcing the company should utilize external supplier’s resources such as
investments, personnel resources and technology, to the fullest. The company consid-
ering outsourcing and finding a partner should look for competencies, which would
benefit their own business. This kind of joint strategy will decrease risks in a rapidly
changing environment and also provides the customers with better service due to fast
service development in joint operational environment.
Similarly Elmuti’s research has discovered some of the main reasons companies choose
to do outsourcing. They are listed accourding to their ranking in following Table 4.
16
Table 4-Reasons for Outsourcing (Elmuti 2003: 36)
What Elmuti discovered was that the most common reasons for outsourcing were; re-
ducing costs, improving quality, improving delivery and reliability and need for re-
sources or competence that the company does currently not have available. Although
cost reduction seems to be still the main reason for outsourcing, but as the table above
illustrates there are a lot of companies that outsource for other reasons. The reasons
for outsourcing define the choice of outsourcing partner; finding a good fit is more
important to the success of outsourcing than choosing the most inexpensive pricing.
There are however risks involved when outsourcing. Aron and Singh have studied the
risks related to outsourcing. They have divided the risks into two categories; opera-
tional and structural risks. Operational risk means that outsourcing provider cannot do
the work as well as the process was done in-house. Client companies should realize
that takes time to learn the products and processes of the client company. The opera-
tional risk can be lowered with the company’s ”ability to codify work. When companies
document the work that employees do, describe the different situations they face, and
17
stipulate what employee’s responses should be in each scenario, people anywhere in
the world can do the job for them” (Aron et.al. 2005). Structural risks arrive when cli-
ent assumes that the service supplier always wants to maximize also their clients’ in-
terests, but if suppliers’ and clients’ interests are at odds, supplier does most likely
what benefits their company the most (Aron et.al.2005). Aron and Singh claim that to
minimize the risks involved in outsourcing the companies should define the quality of
service they need so that it does not affect their customer relationship negatively.
What they mean is that it is important to define the key measurements so that the
processes can be monitored properly after implementation so that the quality of the
service provided is easily quantified. Equally important is to have the tools for doing
this in real time so that should any issues arise they can be tackled as soon as possi-
ble. (Aron et.al 2005)
In this section some elements of strategic outsourcing were described. Firstly the focus
was on core competencies, acquiring competitive edge by selecting the strategically
right partner who possesses resources from which the client company could benefit.
Then some risks involved in outsourcing were discussed, such as structural and opera-
tional risks. The next section focuses on researches done on successful outsourcing
and describes common elements found in successful outsourcing processes in detail.
3.3 Successful Outsourcing
In the previous section reasons for strategic outsourcing were discussed from Elmuti’s
and Quinn and Hilmer’s research and elements to reduce the risk of outsourcing from
Aron and Singh’s research.
In this section Elmuti’s and Barthélemy’s research is used as a basis for constructing a
preliminary structure for successful outsourcing. According to Elmuti’s research the
following factors listed according to their ranking (Table 5) are incremental elements in
a successful outsourcing project.
18
Table 5- Factors in successful outsourcing Projects (Elmuti 2003 :38)
In this table 5 Elmuti has listed 14 top factors rated for successful outsourcing project.
Elmuti has highlighted the importance of clear objectives and expectations, which
could be described as the scope of outsourcing. Other important factors are choosing
the right partner, which came also apparent in previous section on strategic outsourc-
ing. Also number 12 on the list is short-and long-term benefits, which should be con-
sidered while doing the partner selection. Third on the list is negotiating a good con-
tract. Other elements on the list support the value of a contract such as adequate per-
formance criteria and anticipating change. Communication and cross-functional pro-
cesses need to be considered both during project as well as throughout the partner-
ship. Management and HR involvement are a crucial part of leading the process suc-
19
cessfully forward. Finally infrastructure needs to support the service and in every step
there has to be adequate planning.
Similar elements emerge in Barthélemys list on risks of outsourcing. The list of risks
involved from Barthélemys research is as follows:
(1) outsourcing activities that should not be outsourced; (2) selecting the wrong vendor: (3) writing a poor contract; (4) overlooking per-sonnel issues; (5) losing control over the outsourced activity; (6) overlooking the hidden costs of outsourcing: and (7) failing to plan an exit strategy (i.e., vendor switch or reintegration of an outsourced ac-tivity) (Barthélemy 2003:87)
So both Barthélemy and Elmuti agree that the scope of the outsourcing should be care-
fully considered. There are risks involved if wrong activities are outsourced. Same thing
applies if too much of the process is outsourced (Bartélemy 2003). Same risk also ap-
peared in section 3.2, when strategic risks were discussed and they too should be con-
sidered when deciding on the scope of the outsourcing.
Barthélemy and Elmuti highlight partner selection as vital part of the outsourcing pro-
cess. If outsourcing is considered as a strategic part of business, the technology, re-
sources and investments the potential partner can provide, could benefit the out-
sourcee’s core business.
If partners do not invest time in defining good contract that combines flexibility for
both of their businesses to grow and develop, the agreement needs to be renegotiated
soon. Elmuti also highlights the importance of defining clear objectives and expecta-
tions for the outsourcing.
Human resource issues are also important according to both Elmuti’s and Barhélemy’s
research. Elmuti states it is important to have the right people involved both in project
team as well as doing the outsourced service. Elmuti also lists maintaining high moral
and performance as important factors of success.
According to Elmuti technology infrastructure is an important part of outsourcing as it
controls information flow, service systems and customer contact systems. It allows the
smooth transfer of knowledge in cross-functional processes, and enables real time re-
porting. In a contact center environment, which is dedicated for outsourced services,
technology is a vital part of the business and also if high end, provides a competitive
edge for the company.
20
The follow up phase begins when the processes have been transferred to the outsourc-
ing supplier. Barthélemy emphasizes that there are high risks involved if a client com-
pany loses control over the outsourced activity. Therefore monitoring the outsourced
activity is vital to its success. Barthélemy states the importance of including an exit
plan to the contract, in case the outsourcing turns out to be unsuccessful.
Therefore what Barthelemy and Elmuti have as common elements for successful out-
sourcing processes are 1. Correct scope of the outsourcing, 2. Choosing the right
partner 3. Defining a good contract 5. Taking human resources into account and
6. Constant communication and collaboration throughout the process. 7. Tech-
nology and 8. Follow-up. Managerial support which Elmuti mentions in his research
is vital part in each step of the process, but it is discussed mostly in section on HR.
In the following subsections the key elements are listed and some concrete examples
are given on each to describe the basic flow of outsourcing.
3.3.1 The Scope of Outsourcing
When doing the preliminary analysis for outsourcing, there are several things to con-
sider. As the Aron and Singh research shows, there are high risks involved if a compa-
ny outsources the wrong processes. The process needs to be documented precisely so
that it can be outsourced. In some processes, outsourcing is just not a feasible option,
for example if a process heavily relies on tacit knowledge, which is not easily
“codable”, as Aron and Singh describe it. In such cases it might be a better option to
keep that part of the customer service process in-house, as it would require a lot of
effort transferring the knowledge and keeping it updated. Therefore outsourcing pro-
cesses that are not essential to the core business and are relatively easily instructed to
suppliers are feasible option for outsourcing. This allows the company to focus their
own resources on developing their core competencies (Aron et.al. 2005).
Hammer talks about choosing the “intercompany process that offers the greatest op-
portunity for improving your overall business performance” (Hammer 2001: 90). The
company should focus on their core business and outsource processes that can be
done better elsewhere. When you have defined the scope of your outsourcing you can
use this information to find a suitable partner. This way both partners benefit from the
collaboration.
Barhélemy warns about outsourcing too much of the processes and enough
knowledge is not kept in-house, in few years the supplier owns the process. To avoid
21
this there should always be sufficient amount of information on the process retained
in-house, so that if the worst happens and there is a need to change the service sup-
plier, the company will be able to do so (Barthélemy 2003).
3.3.2 Choosing the right partner
For outsourcing to be beneficial to both parties the client and outsource supplier com-
panies’ businesses must match, so selecting the right partner is crucial for the success
of the project. If we look at Elmuti’s list on reasons for outsourcing in Table 1, the top
four reasons for outsourcing, although cost efficiency is still on the top, there are other
important strategic reasons for outsourcing, and these elements can be affected by
choosing the right partner.
Delivery & reliability such as availability of right kind of service personnel could re-
sult into outsourcing. Quality of service is connected to the delivery and reliability as if
there are enough resources available; the quality of the service improves. Also the out-
sourcing supplier provides service specialists to respond to the customer contacts and
therefore might result in better service quality. Resources such as specific technology
may be a good motivator for outsourcing as licensing and hardware is relatively expen-
sive the benefits of acquiring a partner with the right tools provides significant cost
savings.
To determine what kind of outsourcing supplier is needed, it is important to under-
stand the company’s service needs. For example if the service requirements are highly
seasonal, so that it takes two people to handle all customer contacts during the sum-
mer, and eight people during the winter, it is reasonable to claim that outsourcing part
of the customer service might be viable option to the company. Another reason might
be that the business is expanding and there are currently not sufficient amount skilled
customer service personnel in-house, outsourcing might be an option instead of re-
cruiting and training new people. One more reason for outsourcing could be that the
company is lacking the technology needed for handling their customer service and out-
sourcing might provide them with the right tools for their customer data.
Furthermore in order to have a good working relationship with the outsourcing suppli-
er, the companies must share similar values. Barthélemy discusses the importance of
hard and soft qualifications for outsourcing partner as follows:
22
• Hard qualifications are tangible and can be easily verified by due dili-gence. They refer to the ability of vendors to provide low-cost and state-of-the-art solutions. Important criteria also include business experience and financial strength. • Soft qualifications are attitudinal. They may be non-verifiable and may change depending on circumstances. Important soft criteria include a good cultural fit, a commitment to continuous improvement, flexibility, and a commitment to develop long-term relationships. Trustworthiness is an important soft criterion. (Barthélemy 2005:89)
What Bathélemy is saying is that it is not only about due diligence but also companies’
values need to be similar and there has to be trust between the partners. Optimally the
partner provides company with flexibility and continuous process improvement and in
that way contributes to the outsourcing company’s competitiveness. With all this work
done to find the suitable partner, still sometimes the goals of the supplier and custom-
er company do not meet, so it is vital to have all the important elements of the service
defined in a contract.
3.3.3 Defining Contract
Elimuti’s list in Table 3 mentions adequate skills to negotiate a sound contract as
third most important reason for a successful outsourcing. Although much time and
effort has been used for finding a suitable partner for outsourcing and there is mutual
trust, having everything defined in a contract clears any need for interpretation later
on. ”A good contract is essential to outsourcing success because the contract helps
establish a balance of power between the client and the vendor” Barthélemy 2003:90.
The contract must be flexible enough so that there is no need to renegotiate every
year as the business evolves.
There will be situations when the outsourcing supplier companies and client companies’
priorities do not meet. In order to make sure that this does not affect the quality of the
service it is important to define the goals and minimum requirement in the agree-
ment. It is equally important to follow up on these quality requirements, by monitor-
ing the service continually. To support this, outsourcing company might benefit from
defining incentives and penalty clauses in the agreement. This way it is in both par-
ties interest in the long run to maintain the quality level that was originally agreed up-
on. Balancing with flexibility and control is contractual issue that a lot of companies
struggle with. Finally to assure that the clients business will not suffer from making
23
potentially a wrong choice of partners, it is important to have an exit strategy and
not to tie the company to a contract you are not able to get out of.
3.3.1 Human Resources
Human resources play an important role in every phase of an outsourcing process.
Firstly they are needed to determine what kind of resources is needed in the project
team to get an outsourcing project successfully through. Secondly HR decides what
kind of people will be recruited for the new service. Thirdly as all restructuring is
going on, they need to convey the management support and keep up good mor-
als in the company during the process. It is important to recognize the key employ-
ees and have them remain motivated during the outsourcing process and, specifically
the company must identify the employees who possess this firm-specific knowledge.
Also the management should be prepared to offer higher salaries and benefits to them
to keep them in house (Barthélemy 2003). Barthélemy states that
Retention of knowledge and skills is a key issue. Irrespective of the pro-file of the service provider, the actual work is done by individuals har-nessing their skills, knowledge, experience, and the technology available to them. If high staff turnover is experienced, then the quality of the work will deteriorate noticeably, particularly in specialist technical areas and analytical work. (Barthélemy 2003: 91)
What Barthélemy is saying is that for the quality of the service, it is vital that infor-
mation is not lost due to loss of experienced team members. That is why it is important
to establish the key employees and make sure they remain in service all through the
transition phase. After transition phase HR plays an important role in retaining custom-
er service personnel, as each skilled worker lost from the team, will result also in loss
of knowledge and therefore worsening quality of service.
Aron and Singh similarly talk about operational risk in section 3.2, which means that it
takes some time for the new service team to learn the client’s service and products.
This needs to be considered when planning service outsourcing.
3.3.2 Communication and collaboration
Communication is important throughout the whole process. To have the same idea
on what is expected from the service, both in metrics and in values, it is important that
the partners speak the same language. Hammer’s second principle in implementation is
24
“communicate relentlessly”. This key element of change management applies also
here, during structural changes in the company, it is always better to communicate too
much than too little.
According to Grönroos and Helle supplier’s role is not only to deliver resources, but
they should also “support their client’s performance by aligning their resources, compe-
tencies and processes with the clients” (Grönroos et.al. p.347).
When the decision for outsourcing has been made, the day-to-day operations need to
be changed to accommodate the new service supplier. Hammer lists things to consider
when redesigning operations to include outsourced partner:
1. The final customer comes first 2. Entire process should be designed as a unit 3. No activity should be performed more than once 4. Work should be done by whoever is in the best position to do it 5. The entire process should operate in one database.
(Hammer 2001: 90-91)
To have day-to-day activities running smoothly it is important that efficient channels of
communication have been agreed upon.
If some of the service functions are produced partly by the outsourcing supplier, partly
in-house it is vital to have clear rules on information flow in these cross-functional
areas. Current technology helps in this respect, as there are multiple ways of storing
and transferring information between different business units. Next section we will look
into the technological elements of outsourcing.
3.3.3 Technology
As already noted in the previous sections, customer service is a very technical busi-
ness. Acquiring suitable technology in-house might prove expensive. As listed in Elmu-
ti’s table for reasons for outsourcing in 3.2 this might be one good reason to consider
outsourcing to a service supplier where the infrastructure is readily available. Apart
from the work itself (telephones, email, chat, internet landing pages etc.) there is also
reporting and customer data management to consider.
If the service provided is more complex, a system that enables customer information
transfer smoothly from one unit to another is needed. Technology not only enables
data transference between the outsourcing client and service supplier but also between
25
units that are located in different geographical areas. This means that technology frees
the service from locational limitations.
Reporting is an essential tool in outsourcing. Without measurable targets it is impos-
sible to determine if outsourcing has been successful or not. It is vital that measure-
ments are tracked on timely fashion, as the customer satisfaction is directly compara-
ble to good quality customer service.
3.3.4 Follow-up
The process of finding the right partner can be very costly and time consuming, so it is
important to make sure that agreements are drawn in such a way that both parties
benefit from the collaboration. After the implementation the client can monitor the out-
sourced service by following daily and monthly reporting and it is also advisable to plan
weekly and monthly follow-up meetings with the supplier. If the customer contact vol-
ume is high, the supplier would benefit if the client were to produce contact forecast-
ing according to their contact history data.
It is important to keep some of the service knowledge in-house. By outsourcing the
entire process and not monitoring its continuous development, the client loses control
over their own process. Barthélemy states:
For an outsourcing client, it is particularly important to avoid losing con-trol over an outsourced activity. Such a loss of control has two distinct or-igins. First, the client may not have the capabilities to manage the ven-dor. Second, the client may not actively manage the vendor.” When an activity is outsourced, it is crucial to retain a small group of managers to handle the vendor. These managers must be able to develop the strategy of the outsourced activity and keep it in alignment with the overall corpo-rate strategy (Barthélemy 2003)
Vendor management differs in many aspects from running operations inside the com-
pany. The elements that were agreed upon during the contract definition need to be
monitored so that the quality of the service remained on the agreed level. Also it is
important not all knowledge is outsourced, sometimes the change of supplier is re-
quired, so it vital that information it also retained inside the client company as well.
26
3.4 Conceptual Framework from literature
This section began with Quinn and Hilmers research on strategic outsourcing. What
was discovered was that the strategy chosen determines most of the decisions that
follow: what to look for in a partner and what kind of capabilities could be acquired
with the partnership. Then Aron and Signs theory on the risks involved in outsourcing
was explained. Next Elmuti’s key reasons for outsourcing were introduced. They in-
clude reasons such as reducing costs, improving quality, improving delivery and relia-
bility and need for resources or competence that the company does currently not have
available. Barthélemy and Elmuti researches revealed common reasons for successful
outsourcing process. Based on these key elements, a conceptual framework for suc-
cessful outsourcing process is constructed.
These key elements in figure 4 include defining the scope of outsourcing, choosing the
right partner, negotiating a good contract, communication and collaboration, personnel
and technology and follow-up on the service. In addition to the structure made origi-
nally from Barthélemys and Elmuti’s lists, transferring and planning for day-to-day op-
erations is also included from Hammer study to the Conceptual Framework.
Figure 4-Preliminary Conceptual Framework
27
Firstly Strategy of the outsourcing needs to be defined. The scope is determined by is
the process is part of the company’s core competencies or not. Then codability of the
work needs to be considered. Finally there must be some knowledge left in-house, as
vendor management without knowledge of the work is difficult and exiting the agree-
ment becomes difficult. In partner selection thing to consider are quality of the service,
resources needed and similar value structure with the service supplier.
Next phase is defining the contract. The objectives and expectations need to be de-
fined clearly. If needed the can be emphasized in the contract by implementing incen-
tive and penalty clauses. Finally exit strategy is useful to have, in case the collabora-
tion with the supplier is not working.
In implementation and follow-up phases the importance of human resource manage-
ment, communication and technology has all a significant role in in the success of the
outsourcing project. Human resource elements to be considers include selecting right
resources for the project and for the service team. The company doing the outsourcing
needs to make sure the key employees remain for the duration of the implementation,
as that is vital to the retaining of knowledge. Alter implementation the supplier compa-
ny needs to learn the new service and make sure that the service team receives
enough support so that staff turnover remains at a reasonable level.
Communication between both companies during the transfer of the service as well as
collaboration after implementation is important. Cross-functional processes need to be
running smoothly and sharing of knowledge needs to be unobstructed between two
companies.
Outsourcing services required a lot of technology as information flow between the two
companies need some form of transportation. Service system enables the outsourcing
supplier to serve the client company customers. Finally reporting makes it possible for
the client to monitor the quality of the service.
This section dealt with constructing a conceptual base for a successful outsourcing
process. In the next section the case project is introduced and its process steps are
described in detail with the help of data gathered from the interviews with the supplier
and client company stakeholders.
28
4 Case Outsourcing Project
The case project has been selected as an example to illustrate in a concrete way the
elements of the outsourcing process. To determine the steps of the case project, the
people interviewed were the outsourcing client company co-owner, supplier HR man-
ager, IT manager and CEO. Also the people currently taking the customer service calls
were interviewed to get a clear view on how the service is currently running and what
kind of preparations were made to achieve that. First the process of outsourcing is
described by introducing the case project. Then the results of the interviews are intro-
duced and finally data gathered during the interviews is analyzed.
4.1 Data Collection
Data for this section was collected by one-on-one intrevies with key stakeholders of
the project and the service team currently taking the calls. All interviewees were given
the main questions beforehand by email before each interview. Each interview began
with an explanation of the questions and a time approximation for the interview. If the
given answers were too general or vague in nature, additional questions were asked to
provide a sufficiently detailed description of the topic.
Defining the right interview questions was difficult, as questions are not supposed to
influence the interviewee’s responses. Balancing between objectivity and the need to
get answers from all areas of the process was challenging. The language of the
interviews was Finnish. All interviews were then translated into English and sent back
to each interviewee for verification. These translated field notes can be found in
appedix of this study.
4.2 The Outsourcing Case Project
The implementation took place already in 2011, so both historical data from the out-
sourcing as well as current data from the customer service team taking the calls for the
client company were collected.
This project started with the client company’s actual need for an outsourcing partner.
They had grown in such a pace that they either needed to recruit people to answer the
calls in-house or they needed to find the extra resources elsewhere. They decided on
29
outsourcing, as they felt it would give them more flexibility and they would not have to
worry about vacations or sickness leave as the outsourcing supplier would be responsi-
ble for providing the necessary resources regardless of the situation.
After a round of benchmarking of suitable partners the client company selected a few
potential suppliers to go further with the negations. Nesenta was contacted and prelim-
inary negotiations begun with a meeting of the client company co-owner and supplier
company CEO. They felt that there is potential for a partnership so the client was invit-
ed to a start-up meeting at the supplier company premises. In this meeting only the
team leader and CEO were present from the supplier company. They discussed the
service, how the client would like the calls to be answered, and how documentation
should be done to the client’s customer service system.
After the meeting there was a long discussion at the supplier company to determine if
it was even possible to take these calls, as the service seemed quite complicated. After
they had reached the decision that calls can be taken, the team leader contacted the
HR manager and IT to move forward with the case project outsourcing. After discuss-
ing the resources the team leader and HR manager decided to use in-house resources
for the team, which meant that no new recruiting was required.
Similarly, the IT department received basic information from the team leader and as
the project moved forward. As the team would be using the client’s customer service
system, there was no rush with the implementation. The only surprise was that the
client wanted separate numbers for each local agency, so the call system generation
took longer than expected. Reporting is quite simple as the client had no specific de-
mands in that regard.
As the team was already customer service professionals, the client company provided
only the training needed. The training was done in two stages, firstly the team was
introduced how to operate the customer service system and shown the maintenance
process from a video and explained what to do with an average call. After a few weeks
of taking the calls, and sending more difficult cases to the main office, the team got
additional training for the service. At a later stage some quality issues were discovered
and they were resolved with the help of a consultant. All interviewees state that overall
collaboration has been good.
The next subsections describe the outsourcing case project. The sections follow the
same structure as the Conceptual Framework from literature.
30
4.2.1 The Scope of Outsourcing
As discussed in section 3.2.1 scope of outsourcing should only include processes that
are not client company’s core processes. There are also high risks involved if the com-
pany decides to outsource too much or a process that is not sufficiently codable. Inter-
viewee 1 describes their scope of outsourcing as follows:
Customer service is taking in calls that include service request orders and maintenance team schedule modifications. Basically all calls that can be answered by the data in our system provides, were outsourced. Some additional services and tailored agreements are still handled by in-house team, as the system doesn’t provide support for having the additional services added to the order confirmations and service quote calculations, so those are still done by our own back office team. (Interview 1)
This response explains that client company considered the codability of their processes
and only processes where information was transferrable through their service system
were outsourced. The response indicates that the system has an important role in
transferring information between the client company and outsourced team.
He also mentioned that tailored solutions would probably always remain in-house, be-
cause the knowledge required to do them is only is not currently included in the cus-
tomer service system. Therefore the in-house team handles bigger and more complex
cases, which cannot be resolved by the outsourced team. Interviewee 5 talks about the
service as follows:
We can do all basic maintenance request scheduling and offers for apartment buildings, but all houses that are bigger than 500 square me-ters go for the main office for service offer calculation. (Interview 5)
As discussed in chapter 3.3.1, transferring knowledge that is not documented well
enough can be very difficult to outsource so the decision to keeping that part of the
process in-house is probably wise. In this case, client company decided to outsource
only processes that were codable and were easily documented in the service system.
31
4.2.2 Choosing the Right Partner
Section 3.2.2 discussed the importance of choosing the right partners. The most im-
portant elements discovered were cost, resources, reliability and quality. Interviewee 1
explained what they had looked for in a partner:
We decided to outsource because we knew that then we don’t have to worry about resources during vacations or sickness leaves. We looked for a partner that was reliable, with similar values… We didn’t feel that a tra-ditional telemarketing company would be suited for our service needs. We also needed to take the cost of the service into consideration. (Interview 1)
The client company lists here reasons for their partner’s selection. They had considered
the availability of personnel resources, the flexibility outsourcing offers during sickness
leaves and vacations. The company also considered cost efficiency and value structure
when making their decision for a partner. The quality element of the service is referred
to by commenting on “traditional telemarketing company”. Therefore similar elements
were discovered in literature as well as during this case project outsourcing.
One element mentioned in literature was similar values of the client and supplier com-
pany. There was a long discussion about the partner selection with interviewee number
4. He explained that why in this case their company was selected.
Company representatives came over and we had a good discussion. They called me shortly after. They had decided to choose us because they felt that there was a good vibe in our office. (Interview 4)
He said that the responses they get from their partners are usually very similar; they
select Nesenta because of the good feeling they get, when they enter the premises.
Good feeling tells about the atmosphere in the company, which also reflects of compa-
ny values.
4.2.3 Defining Contract
The important elements that came up in section 3.2.3 researches were goals, minimum
requirements, incentives, penalties, monitoring and exit strategy. The fourth interview-
ee describes the contract defining in the case project as follows:
It is completely different situation if you are negotiating with a company that already has experience in outsourcing then with a company that
32
does it for the first time. First time outsourcees do not know anything about key performance indicators or service levels, so we actually have to suggest adding them to the contract as it will make to monitoring of the service quality easier (Interview 4)
Outsourcing customer service needs more detailed monitoring than having the service
done in-house. To help this process it is important that the client company and supplier
agree on measurements and pricing in the contract, so later on there will not be sur-
prises.
Creating the reporting to monitor the measurements defined in the contract and hav-
ing all systems functioning together requires IT involvement from the start, as Inter-
view 3 says:
During tender phase technology is often missing from requirements, but it is very important to have all technical elements defined and priced in the contract. It is difficult to give a quote if we don’t know what kind of CRM system or communication channels will be used, do we have the technology in-house or do we need to buy it outside. (Interview 3)
For transferring technical information from one company to another it is vital to the
success of the outsourcing to have also the technology team involved early on in the
project.
Barthélemy also includes exit strategy as an important element of the outsourcing pro-
cess. When asked about an exit plan, Interviewee 4 said:
The contract is continuous but with only three months termination period, so there is no need for specific exit clauses. We have no need to ask cli-ents to sign for fixed long period because we have defined our pricing at a durable level. (Interview 4)
In this case exit clause was not needed, as the termination period of the contract is so
short. It reflects more flexible and relaxed collaboration, which is more common in a
mature partnership or smaller scale outsourcing. Durable pricing here refers to that
tactics used by some companies where the first couple of years of the agreement are
offered very cheap but pricing will go up dramatically afterwards and agreement has
no exit clause that would enable the client to change supplier without extra cost.
33
4.2.4 Human Resources
In section 3.3.4 the elements related to HR were key persons, managements support
and training. Key persons are important in different phases of the process. To retain
knowledge during implementation period, operating as part of the project and service
teams. In the case project situation the HR got information about the new outsourcing
partner second hand from the team leader. About the resources the HR manager ex-
plained that:
The client company did not have any specific requirements for the team members, so we were given free hands to select suitable agents for the new service. (Interview 2)
Interviewee 4 stated that initially the client company had thought that the people tak-
ing the calls should be male, as it is a maintenance company and the caller might be
more comfortable talking to men regarding air-conditioning maintenance. The team
leader states in the interview 6 that
We were taught about the process of cleaning by a video that shows how it is done but there a so many structural differences. Some customers ask if they could speak to a man about the job. I sometimes think that it might be better to have some man taking the calls, because I have never done air-conditioning maintenance myself. It might be helpful to go along with the maintenance people to see how it is really done. (Interview 6)
The team leader and HR had discussed it over and decided that it is enough that the
agents are experienced as the customer cases are diverse. This same feedback arose
also in other interviews; they all stated that the service is, due to its diversity on types
of calls, quite complicated. When asked about the training for this service;
The training was done in two parts, first the system and how different customer calls will be solved then we took calls for a while and then we had additional training. (Interview 5)
Interviewee 6 responded similarly about the service training, that it was very good and
they had seen the maintenance process through video.
Team leaders are valued as major asset for their company. Interviewee 2 described
some of the strengths of the supplier company as follows;
34
Our organisational structure is low and our team leaders are really tal-ented. They are responsible for customer contacts, client co-operation and team leading. I think that the lack of hierarchy is good but maybe more hierarchy is needed in the future if we continue to grow as a com-pany. (Interview 2)
She highlights the strength of having skilled team leaders and low hierarchical struc-
ture of the company. She also raises a question of maybe adding more hierarchy when
the company grows.
4.2.5 Communication and collaboration
In section 3.3.5 the communication was stated to be vital part of each step of the pro-
cess especially during the outsourcing project and during operations in cross-functional
processes. Collaboration with these two companies has continued for five years al-
ready. Interviewee 5 explained the collaboration as follows:
The service came to our team a couple of years ago from another team. They have a really good system where customer information is stored. If we can’t do what the customer asks then we send customer information to the main office as call back by email. (Interview 5)
It becomes apparent that the service system is good tool and functions as communica-
tion channel between the outsourced team and the main office team.
When training was discussed in section 4.2.4 both the team leader and the service
agent stated that the training was quite comprehensive. It was held in two parts, first
the team was introduced with the maintenance process by a video and they were
taught how to use the service system. Interviewee 1 however stated that there had
been some quality issues:
Things that came up after the implementation, such as that the training was not sufficient enough to handle the calls in the beginning, but with additional training those issues were solved. (Interview 1)
This statement shows that client took initiative and provided the team with additional
training when they noticed that there were some quality issues. Team leader was very
35
happy about the improvements already in place as it gives the service team more in-
dependence and ability to serve the customers better:
We can now follow the status of a project and tell that to the customers on the phone. Customers can follow up on their projects status online, so they see the same thing as we do in the customer service. (Interview 6)
When asked from the team leader and service agent about the collaboration with the
client company they both responded positively, interviewee 6 said that “co-operation
with this client is very uncomplicated and good and they really listen to what we think”
(Interview 6). The fact that the client has been with the same supplier for five years,
can be interpreted as a successful partnership and this collaboration seems to be good
for both companies.
4.2.6 Technology
Contact centre business is highly technological. For a company to acquire that amount
of technology and keeping it up to date can be very expensive. Outsourcing the cus-
tomer service to a service provider saves the company a lot of money in licencing and
infrastructure costs, as well as provides most recent knowledge and tools for perform-
ing the service function efficiently. Interviewee 3 explained that they received infor-
mation on the case project after a start-up meeting from the team leader.
I got into this project at a late stage, usually if it is a simple small out-sourcing the sales people inform the client what information is needed and we get information from then in the start-up meeting. (Interview 3)
This start-up meeting is a good way of exchanging information between the two com-
panies about technology, services and processes. During the meeting a timeline for the
project can be defined and structure of service team can be decided on.
Especially in a more complicated outsourcing it would be good to have the IT involved in early stage as we need to know what kind of systems will be used, do we need to open service numbers and if we need to ac-cess servers, all firewall openings need to be defined sometimes with several vendors. (Interview 3)
36
As this statement shows if there is a network of suppliers that need to be contacted
and all elements of infrastructure need to be fixed before operation, and this might
take time. To avoid misunderstandings it is good to have all key stakeholders taking
part in the start-up meeting, so relevant information can be shared.
When Interviewee 1 was asked about outsourcing,
If a company is considering outsourcing, they should have a good data-base /tool for guiding the customer service work. Without our service sys-tem, I don’t think that outsourcing would have been possible. Even with our system, we noticed that further development is needed so that the customer service can provide comprehensive service to our customers. (Interview 1)
So he would recommend outsourcings only if there are good tools for providing the
outsourced partner with the product and service information. Their service system is a
vital tool in transporting the information between the two customer service offices.
When asked about the system the service team people commented that “the system is
the best I have worked with, it has a lot of information and it is easy to use” (Interview
5).
Reporting needs to be built so that it complements the quality measurements defined
in the contract. As the client is not in the same premises as the service team the re-
porting gives up to date information on how the operation is running. Interviewee 3
said that
We do the reporting according to customer’s wishes, but if there are no specific requests we also have basic reports available to all customers in our NESQ-service. (Interview 3)
As noted earlier, this client did not have too many requirements for the quality of the
service, so basic reporting was sufficient.
37
4.2.7 Follow-Up
Follow-up is important part of the outsourcing. After implementing the service to main-
tain good customer satisfaction it needs to be monitored closely. This service has been
with the supplier company for five years, but the current team was not involved initial-
ly. As discussed in section 4.2.4 the team leader explained that sometimes the ques-
tions are so detailed and connected intimately with the maintenance process that un-
less you do the maintenance yourself, it is impossible to respond with sufficient
knowledge. This point also came up in interview 1:
We have had some quality issues, which have resulted in some dissatis-fied customers. We have hired a consultant to monitor the calls and dis-cuss with the customer service agents on how they feel about their work and give feedback on the calls and suggest improvements. (Interview 1)
Feedback in this case came from the customers and client used consultant to resolve
the issues. As section 4.2.3 describes there were originally not that many service
measurements. As this shows with outsourced service, it is important to have clearly
defined measurements. According to Interviewee 1 apart from measuring normal tar-
gets, such as queue time and answered calls, the service team had very little require-
ments. Interviewee 1 states that
We do follow up on customer satisfaction that is why we are now improv-ing the service process with the help of our consultants. We have a de-fined a response time for our own team, if a call has been forwarded to our office to solve, so that customers don’t have to wait for the response too long. (Interview 1)
This consultant involvement has resulted in major improvements. Team members felt
that it was a big issue, when they took call backs, they were not able to tell the cus-
tomers when someone would respond to their call.
The response time to the call-backs is very good improvement, all cus-tomers want response during the call, so they are much happier when they at least know when they will be called back. (Interview 6)
In this case the client reacted quickly when they realized that the quality of the service
was not at an optimal level. They hired a consultant to resolve the quality issues and
38
this resulted in definition of service level for the in-house team and other improve-
ments.
Both Interviewee 5 and 6 agreed that the system is very good, it has a lot of infor-
mation and it is easy to use. Considering that this is a complicated service, the system
is a tool that makes outsourcing this service possible. The fact that the customer calls
are so different from each other also makes the service interesting for the team.
As continuous process development is an important part of successful outsourcing the
interviewees were asked about suggestions for improvements. The client company is
hoping to improve the customer service system so that the outsourced team is able to
solve most of the calls.
The company is developing a more comprehensive system that would al-low customer service to take even more complex calls. The improvements include more information about our different products, extensive custom-er history, project follow-up information that this data can also be given by the customer service during the call. We are hoping that this will help the customer service to solve most of the calls by themselves, which would create more satisfied customers, less back-office work for us, and more empowered customer service agents. (Interview1)
So the client would want to deepen the partnership in the future so that the service
team would be able to work more independently. To enable this they are improving
their service system even further.
From technology point of view, Interviewee 3 explained as follows:
I would like to see more proactive product development options in the phone system. And as I said before, technology should be part of negoti-ations already in early stages (Interview 3)
To sum up, interviewee 3 hopes for stronger utilization of technological solutions and
IT involvement from the start of each project.
When asked for ideas for improvement, the HR manager said:
I would like to focus on the continuous training and maybe implementing programs to create career paths for talented team members to grow into team leader roles as it is very difficult to recruit team leaders suitable to our needs from outside. (Interview 2)
As discussed earlier, in section 3.1. continuous learning would reduce operational risks.
39
These development ideas from Interviewees 2 and 3 will be included in the building of
conceptual process proposal for future outsourcing projects of the case company in
section 6.
4.3 Key Findings from the Case Outsourcing Project
There were similarities with the elements found in the literature. The scope of the out-
sourcing was well defined and partner selection was conducted diligently. But the pro-
ject did reveal elements that were missing compared to the Conceptual Framework.
Firstly, there were no specific service level or other quality measurements required
from the supplier. The only request regarding personnel was that agents are experi-
enced and preferably male. The service proved to be complicated to outsource as the
client discovered when they felt a need to further improve the system to help service
team answer more calls and also hired a consultant to improve the service process.
A positive element in the case project contract was that it was based on collaboration
and flexibility there is no need for sanctioning or exit clauses. The contract was built
for a long partnership in mind; it has durable pricing for both companies and only a
three-month termination period. The team leaders are a strong and multitalented re-
source of the company. Future development ideas are to have tighter partnership by
enabling the team solve more customer cases in the phone. IT is hoping for better
utilization product development options during the customer calls and the HR manager
is hoping to implement a continuous learning process for the company in the future.
Important elements that are present in this case outsourcing project are Start-up
meeting, where information between all key stakeholders can be shared. Reporting
is a vital tool in vendor management. Training needs to be sufficient and process
needs constant monitoring and further development. Good tools are needed to
transfer information between the partners and to supply customers with best possible
service. These elements are highlighted to the initial conceptual framework in blue.
40
Figure 5- Process elements from Case Project
In figure 5 the elements that are added to the Conceptual Framework. The focus areas
are mostly related to knowledge transfer between the two companies.
The strengths that were discovered during the analysis were low hierarchy structure
that enables flexibility within the company. One of the company’s assets are skillful
team leaders that take part in customer contacts, day-to-day operations, reporting and
monitoring and planning for the service. Nesenta also has extensive knowledge in con-
tact center technology.
Strengths Challanges Low hierarchical organization Cross-company knowledge transfer Strong technological expertise Intercompany knowledge transfer Multitalented Team Leaders Good organisational culture
Table 6: Strengths and Challenges
There are however, some elements that need further improvement. The most critical
element that came up during several interviews was knowledge transfer both inside
the company and in cross-company processes. This part of the outsourcing process is
looked into in more detail during the next section.
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5 Knowledge transfer
The previous section was about describing the case project of outsourcing, its specific
features and elements. After implementation, during the monitoring of customer satis-
faction, the client company had discovered some quality issues and hired a consultant
to find out how to resolve them. What they had discovered was that the training for
the service was not sufficient and the customer service tool does not provide agents
with enough information to solve all calls directly. This same information emerged in
four different interviews, so it is worth researching further. Therefore this section fo-
cuses especially on the challenges of knowledge transfer. Literature has been consult-
ed to find solutions to tackle this challenge in future outsourcing projects.
5.1 Knowledge transfer and learning organization
To achieve the best possible results in knowledge transfer, an organization has to sup-
port the process. Zahran states what is needed is an “(o)rganizational culture that sup-
ports innovation, learning and cross-boundary knowledge transfer” (Zahran: 463). Zah-
ran continues that in order to be truly successful the reward system should support the
knowledge transfer. Garvin agrees that to achieve the atmosphere that is conducive to
learning, an open environment to stimulate exchange of ideas (compensation to sup-
port learning) is needed (Garvin 1993).
Goh lists the organizational characteristics and managerial practices needed to ensure
effective knowledge transfer.
x High level of trust x Strong culture of co-operation and collaboration x Strong culture of continuous improvement and learning x Organizational design that encourages horizontal communication x The level of skills and competencies among employees need to be
relatively consistent. x Balanced approach to encouraging the sharing and transfer of
knowledge through structured processes. x Reward system should also consider successful knowledge sharing,
co-operation, and teamwork (Goh: 29)
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As discovered in the interview section 4 the organizational structure at Nesenta seems
to have elements that Goh has listed as a suitable environment for efficient knowledge
transfer. They have a low hierarchical company structure that enables horizontal com-
munication, willingness to become organization that supports continuous learning and
improvement and strong technological expertise that would enable knowledge sharing.
In the next section some methods that enable efficient knowledge transfer are intro-
duced.
5.2 Tools for Knowledge Transfer
Contact centers are optimal for creating a learning organization as they store massive
amounts of data from different clients. They also continually improve the service pro-
cess by learning best practices on the job. Garvin says that:
Learning organizations are skilled in five main activities: systematic prob-lem solving, experimentation with new approaches, learning from their own experience and past history, learning from others, and transferring knowledge quickly and efficiently throughout the organization.
(Garvin 1993: 81) The previous section illustrated that the organization needs to have the right atmos-
phere in order to become proficient in knowledge transfer. If we include the character-
istic Garvin says about learning organisations we notice that apart from the right kind
of organisation, individuals also need to learn new skills in problem solving, experimen-
tation, learning from others and ability to transfer knowledge quickly.
There are some important elements to consider if we think about knowledge transfer.
“(T)wo factors of particular importance, knowledge codifiability and internal interde-
pendence. Codifiability refers to the tacit or explicit nature of knowledge” (Cardinal
et.al 2001: 197). This means is that in order to transfer knowledge efficiently, we first
need to identify its nature. Interdependence refers to the nature of interaction and
integration between organizational units (Cardinal et.al.2001: 196).
Nonaka has considered these following four different elements and accordingly divided
knowledge creation into four basic patterns:
From Tacit knowledge to Tacit: This mode is close to apprenticeship where the infor-
mation is transferred by observing and repeating the process by doing it the same
way. From Explicit knowledge to Explicit: This mode is achieved by combining coded
and documented information from different sources and applying them to suit your
43
own needs. To transfer from Tacit knowledge to Explicit requires codifying and docu-
menting tacit knowledge, which can be quite difficult and you need to explain inner
logic and processes to someone else. Transforming explicit knowledge to Tacit is the
process when employees internalize documented information, and they add to it their
own tacit knowledge that comes with experience. (Nonaka )
Therefore to fully utilize all knowledge within the organization it has to be transferred
according to its nature. All patterns of learning should be present in the organization to
get the full benefit. We have now discovered ways to efficiently transfer and create
new knowledge in the organization. Gephart discusses some basic features a company
needs to implement to store knowledge for future benefit.
Table 7-Knowledge transfer (Based on Gephart et.al 1996)
He has divided the features in five different topics that go throughout organizations- all
five should be present for organization to have an efficient way of storing collectively
information received from outside and created within the company (Gephart et.al.
1996). These feature leadership and management, communication and knowledge
systems, structure, support systems and the technology. All of these elements have
also been mentioned in previous sections of this study.
“The knowledge resides in organizationally embedded routines, formed from learning-
by- doing… the new team has to “feel their way through the process” rather than de-
pend upon previously documented experiments for the appropriate steps”(Cardinal
et.al. 2001:200).
This section discussed creating an environment that supports knowledge transfer and
how knowledge is effectively transferred and stored for future benefit. The next section
44
focuses on explaining the elements of the conceptual structure on the basis of which
the improved proposal will be structured.
5.3 Improved Conceptual Framework
As discovered during the case analysis there were some elements that required further
improvement. These areas are marked in red in this final conceptual framework below.
Knowledge transfer in form of start-up meeting enables sharing the knowledge of the
new client’s service to all key stakeholders of the supplier company. In the implanta-
tion phase it is vital to have well-documented service processes, which then can be
used as a training tool for the new outsourced team. The areas of improvement are
highlighted in the following figure in red.
Figure 6-Final Conceptual Framework
Following the chronological structure of the process, it starts with the strategic ele-
ments; Scope of outsourcing, partner selection and getting the right people involved
from the start. Then it moves to contract definition; pricing structure with incentive
and penalty clauses. In the contract, also service description and key performance in-
45
dicators should be defined. Client Company needs to have an idea of exit strategy and
for the outsourcing to be successful, enough knowledge need to remain in house for
vendor management. Transition planning includes recruiting the service team and
transferring the operational information, that is to say service training for the team.
Also cross-functional processes need to be agreed upon. Transferring operations phase
includes transferring the actual operations to the outsourced service supplier and all
interfaces needed in producing the service. Finally when the service is operational, the
client company will monitor the service through reporting and regular meetings. Also
both companies should commit to continually improving the service.
In the next section, this process structure is introduced to the company IT manager,
HR manager so that a feasible process plans for the company’s future outsourcing pro-
jects can be created. The proposal of the conceptual process is then introduced to the
CEO for validation.
46
6 Building Proposal for the Case Company
After doing the research and data collection through interviews, the basic structure for
a feasible process plan is constructed with the help of the supplier company’s key
stakeholders. This structure can be utilized by the supplier company in their future
outsourcing projects. Data collection from the key stakeholders has been done as one-
on-one brainstorming session’s documentation of which is in appendix 7 and 8. The
structure follows the same phases as the Conceptual Framework and case project de-
scription and offers concrete tasks for the Client Company, outsourcing supplier as well
as joint tasks to each phase of the project.
6.1 Process of buildng the Proposal
The proposal is merging information from intial conseptual framework from literature,
results of the case project analysis and additional research to the challenges found in
the case project. First the literature was reviewd to compile intial conseptual frame-
work. Second the case project was documented through one-on-one interviews (data1)
with the key stakeholders in the project and current service team. Third according to
the results of the data 1 analysis, further research was done with special focus of chal-
lenges found in the case project. Finally the elements found during literature research
and case project analysis, were processed in brainstorming sessions with case com-
pany ITC- and HR- manager.
6.2 Proposed Steps
Strategy for Outsourcing
When a company considers outsourcing the first thing to consider is what will be ac-
complished by outsourcing a service. If the company is outsourcing for the first time
this part of the process determines if the outsourcing will be successful or not.
47
Client Tasks
When outsourcing is planned it should be kept in mind that not all processes can or
should be outsourced. Before moving ahead ask these following questions :
-What is your Core business?
-What Processes can be codified and therefore transferred to Outsourcing
supplier?
- What Processes can safely be done elsewhere (if you take into consid-
eration plagiarism, or losing your key competitive edge etc.)
After determining what part of the business process you will be outsourcing, said pro-
cesses need to be documented and streamlined. If your decision to outsource affects
the personnel, make sure you have the documentation finished before announcing to
the employees they will lose their jobs for an outsourced service provider. Specify the
level of quality you want for the service. It is not necessary to have the best possible
service, aim for good enough so that it is not reflected on the customer satisfaction.
After defining the quality level, make sure they are also measurable. Outsourcing done
well can decrease business risk. It can lower technology investments and give more
flexibility in personnel and other resources.
Partner Selection
Partner selection should be based on the outsourcing strategy that has been defined
earlier for the company. The tender phase is a good way of finding the best partner,
suited to the company’s needs.
48
Client Tasks
In the tender phase, ask from the potential partner the right questions. In order to
have the right fit from the partnership, the supplier needs to be able to meet the ser-
vice and technological requirements, offer the right personnel and in general have
similar values and ideas on how a service should be conducted. If the service is com-
plex , be sure to ask about personnel turnover, as it effects knowledge retaining. In an
optimal situation the partner can provide your company with new skills, innovations,
technology and other resources that benefit the core business.
Supplier Tasks
In the tender phase, give the potential partner a truthful description of what kind of
service and technology the company can offer. If the information is not provided by
the client, it would be beneficial to ask what kind of service channels they are wishing
to have, what kind of systems they are using or whether the systems need to be pro-
vided by the supplier. Establishing direct contact with the client in-house and out-
sourced technology partner enables fast collaboration during the planning and imple-
mentation phase. This information is important to have as a basis for the service plan-
ning and estimating the costs of the project correctly.
Make an effort to understand the potential clients’ business model and offer services
that improve the client companies’ inner processes. If the potential partner is new to
outsourcing, act as a consultant to help them make an informed decision.
Joint Tasks
When defining the service, make sure that both companies are talking about the same
things. If both parties are sufficiently knowledgeable there are viable grounds for fruit-
ful partnership. Both companies should strive to understand the other company’s core
business and try to find ways that would be beneficial to both parties.
49
Defining Contract
Client Tasks
When defining the contract the quality requirements and goals for the service need to
be defined. If a particular measurement, for example customer satisfaction is a key
issue for the company, it can be emphasized by asking for sanctioning of the pricing
with poor performance and incentive measures with good performance.
Supplier Tasks
Price the service at a sustainable level, so that you are not forced to renegotiate pric-
ing after one year of supplying the service. Getting new customers in is important, but
it also reflects to the reputation of the company. If company seeks stable growth, this
should be a priority.
Joint Tasks
When defining the contract it is smart to consider the changing business environment
and draw agreement to suit both companies in case their circumstances were to
change. Introducing an exit plan in the contract should be considered. It is not wise to
tie the company to an agreement if there is no way of getting out of it.
At this point the project team who will follow the outsourcing project through needs to
be defined.
Transition Planning
50
Client Tasks
When planning for the transition the training material needs to be prepared. The doc-
umentation done in the beginning of the outsourcing process will help to include all
tasks and processes descriptions that the new service team needs to know in order to
serve customers. Also all cross-functional processes between the supplier and client
should be defined. All reporting to measure the quality of the service should be decid-
ed at this stage.
Supplier Tasks
Reporting model need to be created according to the client specifications. The custom-
er information security issue needs to be addressed, i.e. where the data is stored and
how to ensure its safety. All infrastructure, call and email routing, firewalls, service
platforms, server connections and operational tools need to be created and made op-
erational at this stage.
Joint Tasks
This is a good stage to have a start-up meeting were all details of the project and ser-
vice implementation can be discussed. All key staekholders of the project should be
resent. In this stage the service team and future team leader should be selected. To-
gether with the team leader you should define the people who will be answering cus-
tomer contacts. Outsourcing supplier companies HR manager should be included in this
process. When defining suitable personnel, ask:
-what should the team be capable of, who in our company has the best
knowledge? Are additional resources needed, what systems are needed?
If no specific expertise required, what team has most resources?
Service training should be done just before the launch as the knowledge retention is
weak if it is not been put practical use quickly.
All infrastructure needs to be tested before implementation and communication chan-
nels between different suppliers need to be established. In this phase, it is also im-
portant to decide who is responsible for what.
51
Implementation & Follow Up
Client Tasks
To have sufficient resourcing it would be helpful to the customer service if the client
supplies them with contact forecasting from history data. The outsourcing client should
offer support for the service team especially in the beginning when the service team
has not been able to acquire enough data so that they could service the customer in
the best possible way.
Supplier Tasks
Operational meeting each week both in-house and with the client are important in
maintaining a good level of knowledge on what is happening in the service. Meeting
can be utilized to share information, get a feel of the atmosphere and collect customer
feedback. Reporting should support the quality requirements defined in the contract. If
the transition has been successful and operation has stabilized, the service quality can
be monitored efficiently by adequate reporting.
Joint Tasks
Both parties are responsible for the successful operational transfer and the outsourcing
project management. Initially it would be beneficial to monitor service quality by listen-
ing to the calls; Additional knowledge on how to service the customer better can be
acquired by mentoring and learning on the job. Both companies should commit to con-
tinuous service development, as this is a vital part of maintaining a competitive edge.
6.3 Initial Proposal
The proposal that is presented to the CEO of the supplier company Nesenta includes all
the above mentioned phases and tasks of outsourcing process. This figure illustrates
how the process could be conducted.
52
Figure 7-Initial Proposal
The process begins with defining the strategy for the outsourcing. It then moves to
finding a suitable partner that shares client company’s values and can best support
their core business. Then during the tender phase all the right questions should be
asked to find the strategic partnership needed to improve companys core business.
After finding the suitable service supplier, all quality requirements and pricing to the
agreement need to be defined. It would also be beneficial to have some form of flexi-
bility so that new agreement negotiations are not required every time something is
changed in the business. When all details have been defined for the co-operation,
there should be a start-up meeting where all practical issues related to transition can
be discussed. The transition should be a joint effort so that it can be done smoothly.
Finally you should monitor the service closely and offer all assistance to the supplier so
that they can serve your customers well. Both companies should commit to continu-
ously developing the service further.
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6.4 Summary on the proposal phase
The proposal was built in collaboration with the supplier company HR and ITC- manag-
ers. The objective was to construct a feasible process plan that they can use in future
outsourcing projects of the company. This proposal is now introduced to the CEO of
the case company for validation.
54
7 Validation of the Proposal
This section discusses the process of validating the proposal that has been created
with the help of relevant literature on outsourcing, elements found in the case project
and discussions held with the key stakeholders of the company. The validation was
conducted by introducing the proposal to CEO of the case company for commenting.
The initial process plan was then reviewed step-by-step in a conference call and the
feedback received during this discussion is described in the following sections.
7.1 Feedback on the Proposal
The third data collection consists of presenting the process plan to the CEO of the case
company for validation. The presentation consisted of conceptual process plan and
description of tasks in bullet points. The purpose of this was to find the proposal’s
strengths and weaknesses and update the proposal accordingly. This validation was
conducted by a one-on-one conference call with the CEO. The result of this discussion
has been used to adjust the proposal into its final form.
Initial comment on the proposal was “you have found well all the key elements of an
outsourcing project, it was difficult to find something to add to the process” (CEO). The
process was discussed one element at a time, and this table shows the feedback of
each element
Table 8-Feedback on the Proposal
Phase of the process Feedback
Strategy for Outsourcing
The strategy is defined by if the client has already out-sourced customer service of if they are doing it for the first time
Partner selection The competitive edge that outsourcing enables is probably something companies don't realize
Defining Contract
The KPIs should be clear in the contract and value of each measurement has to be discussed with the client, so that price-service quality ratio is at optimal level for the client.
Transition This needs to be a joint effort for it to succeed
Follow-Up
There is a difference between managing partnership process than in-house team. The personnel matters don't affect as much but service monitoring may require more effort.
55
The CEO highlighted a few elements in the proposal. Firstly he stated that it is im-
portant to differentiate a first time outsourcee from companies that have already out-
sourced the service and are looking for a new supplier. This affects several elements;
firstly the level of documentation in a company that has previously outsourced the pro-
cess will be more detailed and suited for outsourcing suppliers and manual on how to
do the process. Secondly the company has inside knowledge on vendor management,
key performance indicators of the field and better idea of what they require from the
outsourced service. If a company is new to outsourcing they will require a lot of assis-
tance on defining the service, defining the quality and monitoring the quality. It is a
completely different process to monitor the in-house service team than to do the same
for the outsourcing supplier team.
Partner selection was discussed at length. The CEO pointed out that a lot of companies
considering outsourcing neglect to consider the business advantages outsourcing can
bring to the company. In finding a well-fitting partner the resources of the company
may increase and they can focus on their own core business and achieve advantage in
their field.
Transitioning the service needs to be a joint venture for it to succeed. There needs to
be mutual trust and good communication between the partners. Also all cross-
functional process roles and responsibilities need to be clearly defined.
Personnel issues do not affect you but you will still remain a process owner and are
responsible for informing any changes in it. Also it is vital to remain knowledgeable on
the service process as it will evolve and if you find yourself in a situation that requires
a change in vendor, you will need to have the most recent process of the service doc-
umented. Monitoring the service should be done on a weekly, monthly and quarterly
basis. The level of reporting is dependent on the maturity of the partnership, after the
service is running relatively smoothly there is no need for constant controlling.
7.2 Final Proposal
The final proposal includes the element contributed by the company CEO. He stated
that the strategic difference between a company that has previously outsourced and
one that is doing it for the first time is significant. In addition, he highlighted the im-
portance of strategic partner selection and the role of vendor management compared
to management done in the in-house team.
56
Figure 8: Final Conceptual Process
The feedback did not reveal any significant changes it the initial proposal, but the ele-
ments that the CEO felt had significance to the process are in the figure 8 highlighted in
red. First important addition is determining if the client is new to outsourcing or has
outsourced processes before. If the outsourcing is done for the first time it requires
from the supplier a more active role as a consultant for the process. Second partner
selection is often undervalued by client companies, the competitive edge that right
partner can supply can result into client company’s success in their field. Third the
quality requirements determine the process during the follow up phase. If the service
level and key performance indicators are correctly defined in the contract the vendor
management is much easier for the client company. Fourth the start-up meeting has an
important role in transferring information between partners and as highlighted by the
CEO, transition need to be a joint venture for it to succeed. Finally when the service is
in operation the service monitoring or vendor management is different when the service
is no longer in-house process. The involvement from the client company is important
and helps the service team to succeed in supplying the customers the level of service
the client company wants.
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7.3 Recommendations
This process plan was built in tight collaboration with the case company stakeholders,
and it already resembles case company process in many details. Findings from the
conceptual framework and the validation from the CEO both emphasized the im-
portance of defining outsourcing strategy and the scope is determined by what can be
outsourced. The process should not be client company’s core competencies and it
needs to be codable so that it can be documented for the supplier company. Supplier
should take an active consultant role especially if the client has never outsourced ser-
vices before.
During partner selection a significant competitive edge can be obtained by choosing
the right partner. It would benefit both parties if the supplier company would aim to
create additional value for their client’s service process.
Quality measurements should support the client company’s strategic goals and can be
emphasized by incentive and sanctioning clauses in the contract. Clearly defined meas-
urements also make the vendor management easier for the client company.
Start-up meeting is a very important for the success of the project. All key stakeholders
in the project should be present so that all vital information can be shared between the
companies.
Finally in the follow up phase service monitoring should be a result of the quality re-
quirements defined in the contract. Client involvement makes the start of the out-
sourced service easier and this would benefit both client and the supplier companies.
These suggested improvements require only minor changes from the case company
but they could give the company significant competitive edge.
58
8 Discussion and Conclusions
This section summarizes this study and gives suggestions on implementing the new
conceptual process plan in future outsourcing projects.
8.1 Summary
This study dealt with building a conceptual step-by-step process for a customer service
outsourcing project. The case company provides its clients outsourced customer ser-
vices. They have created a service solution that combines technology and resources
needed for outsourcing customer service. To complement this solution, this study was
conducted to provide a conceptual process for implementing the service to the out-
sourced service supplier.
Based on the findings in literature on the outsourcing elements needed, interview
questions were created to determine the current process. The interviews shed light on
the process in the case project. Some of the elements of outsourcing found in the liter-
ature were visible also in the case project such as defining the scope of outsourcing
and careful partner selection.
Also some elements differed from the literature. For instance, there was a start-up
meeting in the case project. It did not however include all stakeholders from the sup-
plier company. The HR manager and IT manager got second hand information on the
project from the team leader. Although the training was thought out, it was still not
able to convey all the required information, which later resulted in quality issues. These
issues were then tackled with the help of a consultant, with good results. Therefore the
analysis of the project shows there were some challenges in the knowledge transfer of
the service. This was researched in more detail to improve the process in future out-
sourcing projects.
Data for the study was collected from relevant literature and by one-on-one interviews.
The process proposal was built in collaboration with the case company key stakehold-
ers and validated by the CEO of the company.
To conclude, suggestions on the new process implementation to the company are dis-
cussed and suggestions given for further development of the knowledge transfer pro-
cess.
59
8.2 Practical/ Managerial Implications
The key findings of this study revealed that improvements in knowledge transfer would
benefit the case company. The implications are listed in three parts; firstly managerial
support for learning organisation, second technology’s role in a learning organisation
and finally suggestions on diagnostic tools for measuring the success of knowledge
transfer.
Managerial support
In order to create a learning organisation there are three important factors for the
company focus on to facilitate efficient knowledge transfer. Firstly, the company should
enable learning across the entire organisation. Then they should encourage employees
to share knowledge they have created on the job. To show people in the company that
managers are dedicated to establishing a learning organisation, managers should allow
time for the learning and sharing of knowledge. Also if knowledge transfer is important
to the company, the reward system should be connected to the success in creating,
retaining and sharing knowledge.
Technology enables the storing and transferring of information, throughout all levels of
the organisation. The employees would be able to access all information and share
what they have learned on the job with their colleagues. Technology can be used to
both individual as well as group learning.
The retention of knowledge could be measured for example with a test after the initial
training followed by a few weeks practicing and then repeating the test to establish the
learning curve. The reward system could be based on the results of the test. If an em-
ployee is in a team leader or mentoring role and sharing information, the recipients
could do a peer evaluation on sharing the knowledge.
8.3 Evaluation of the Thesis
The proposal built during this study requires only minor modifications to the case com-
pany’s current processes. All recommendations aim at better transfer of information
and knowledge, which is a commonly recognized issue in most companies so offering
some ideas on how to improve this part of the process will most likely be welcomed.
60
8.3.1 Outcome vs. Objective
The objective of this thesis has been to create a conceptual step-by-step process plan
that can be used as a tool when implementing future outsourcing projects. During the
study relevant literature on successful outsourcing was used as guidance for prelimi-
nary outsourcing process structure. This structure was then utilized as a basis for the
interviews to get a comprehensive picture of the case project. And finally the step-by-
step process plan was constructed in collaboration with supplier company key stake-
holders and then validated by the CEO of the case company.
Therefore the outcome of this study is what is sought out to be, a conceptual step-by-
step process. Unfortunately due to time constraints, the new process has not been
tested yet.
8.3.2 Reliability and Validity
Four elements were included in the validity and reliability plan in section 2.3 to ensure
that the study was conducted with sufficient rigor throughout the research. The study
has followed a rigorously documented methodological path, which is a rudimentary
element for establishing reliability in a case study.
Triangulation was covered as interviewees for this study were selected so that several
different points of views on the outsourcing case would surface. The interview ques-
tions were designed so that the data collected is both objective and valid for the pur-
poses of this study. The interviewees’ background and level of expertise was high and
it was documented on each of the interviewee’s field notes.
Construct validity was established as the key concepts of this study were introduced in
section 1.2 and the case project data was linked to relevant published studies on out-
sourcing.
External Validity is realized as the case in this study has functioned as an example on
outsourcing process. It cannot be used by itself as a generalization for the outsourcing
process. As the study also relies on relevant literature on outsourcing processes, and
all elements found in the case project were supported or contradicted by literature of
the Conceptual Framework, it is feasible to claim that the case in this study serves as a
good example of an outsourcing process.
61
Reliability
The research process has been documented meticulously in order to give a compre-
hensive idea of how this study was conducted. If later another researcher were to fol-
low the same procedure as described, would they arrive to same findings and conclu-
sions? Time passing may alter the recollections each interviewee had on the case pro-
ject so the result would probably not be identical. The researcher is not an employee
of the outsourcing supplier company, so objectivity should not be an issue, as in this
case the researcher has acted in outside consultant capacity.
Transparency of the study is shown in all documentation of data collection. All infor-
mation received through interviews was documented in field notes and the correctness
of the notes was verified by each interviewee as they received the field notes for verifi-
cation.
Research bias
During the interviews, the questions may have been slightly biased, even though all
effort was made to convey objectivity. As the researcher had already familiarized with
outsourcing best practices, they were used to construct the interview questions. How-
ever the interview responses prove that the interviewees gave their honest description
of the process, and thus bias in this case was a relatively minor factor.
Due to the fact that the only major challenge identified during the case project inter-
views was related to knowledge transfer and training, it felt during the study that
knowledge transfer received too large of a focus compared to other elements of the
outsourcing process.
8.4 Closing Words
This study focused on finding a conceptual process for outsourcing customer service.
The findings from literature and especially from the case project analysis show clear
structure for successful outsourcing project. The challenge of knowledge transfer found
during case project analysis is very common to lot of companies. If more focus is
placed on this element, the process will be improved and the case company will have
competitive edge on outsourcing business in the future.
62
References
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204.
Eisenhart, K. M., Graebner, M.E. (2007). Theory Building from Cases: Opportunities
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Elmuti, D. (2003). The Perceived Impact of Outsourcing on Organizational Perfor-
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Gephart, M. Marsick, V., Van Buren, M., Spiro, M. (1996). Learning Organizations Come
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ume 24 (5), pp.455-468
Appendix 1
1 (3)
Field notes Interview 1
Research Interview
TOPIC: Client company_Co-owner_______________________________________
Information about the informant (Interview 1) Table 1
Details Client company Co-Owner
Name of the informant Interviewee 1
Position in the case
company
Co-owner
Date of the interview 19.2.2016
Duration of the interview 23 min
Document Field notes
Field notes (Interview 1) Table 2
* Think of formulating your own questions; these are suggestions for you to start
Topic of the
interview
QUESTIONS
FIELD NOTES
1 Background
/Experience
Background of the
project?
Please give an example
of how you were
involved in this
outsourcing project?
Our company was established in 2009. Company
provides clean air measurements for building
societies and home owners. I am the co-owner of
the company and I am responsible for our business
development.
2 Project
When did you
outsource? Why did you
decide to outsource?
How did you select you
outsourcing partner?
What were your main
criteria?
Outsourcing of the customer service took place in
2011, before that the service had been produced
in-house. Volume of the calls had increased so
there was a need for additional service agents. We
looked for a partner that was reliable, with similar
values… We didn’t feel that a traditional
telemarketing company would be suited for our
service needs. We also needed to take the cost of
the service into consideration.
3 Defining the
service
How did you define the
parts of the service you
will outsource? What
was left in-house? How
Customer service is taking in calls that include
service request orders and their schedule
modifications. All the calls that can be answered by
Appendix 1
2 (3)
does the communication
function between the
teams?
the data that our system provides were outsourced.
Some additional services and tailored agreements
are still handled by in-house, as the system doesn’t
provide support for having the additional services
added to the order confirmations and service quote
calculations, so those are done by our own back
office team. I think outsourcing the tailored
solutions will always remain in-house because the
knowledge required can only be attained in our
main office. Delegating a process from the
customer service currently comes as call request. If
the call has elements that the outsourced customer
service is not able to solve during the call, it is sent
to the main office for resolution as call request.
Tool for working both in-house and outsourced
team is a service system that provides product and
service descriptions, customer data and project
follow up. System ensures co-operation between
the in-house and outsourced team.
The company is developing a more comprehensive
system that would allow customer service to take
even more complex calls. The improvements
include more information about our different
products, extensive customer history, project
follow-up information that this data can also be
given by the customer service during the call. We
are hoping that this will help the customer service
to solve most of the calls by themselves which
would create more satisfied customers, less back-
office work for us, and more empowered customer
service agents.
3 Key
concerns
Identify
strengths/p
roblems
What are your key
concerns about the
project that took place?
Identify
strengths/problems
We had 2 people that were responsible for the
outsourcing at our end, during the project I met 3
people from Nesenta, mainly the CEO and
customer service people, none of them were from
the IT team. The implementation itself went well,
but things that came up after the implementation,
Appendix 1
3 (3)
such as that the training was not sufficient enough
to handle the calls in the beginning, but with
additional training solved those issues. 4 Quality
control
How do you monitor the
quality of service?
There are no sanctioning or incentives in our
customer service agreement, but we do follow up
on customer satisfaction, that is why we are now
improving the service process with the help of our
consultants. We have a defined a response time
for our own team, if a call has been forwarded to
our office to solve, so that customers don’t have to
wait for the response too long. 4 Analysis In which areas do you
think there is space for
improvement? In what
way? How could that be
done?
We have had some quality issues which have
resulted in some dissatisfied customers. We have
hired a consultant to monitor the calls and discuss
with the customer service agents on how they feel
about their work and give feedback on the calls and
suggest improvements.
5 Best
practice
Can you suggest some
guidelines of how to do
it?
What best practice do
you think the company
should follow?
Outsourcing to my opinion is impossible without the
right tools, for example if we did not have our
customer system, I don’t think that the outsourcing
would have been a feasible solution for us, we
would then probably have recruited more people to
our in-house team.
6 Developmen
t needs
How could the company
avoid the problems in
case of the next
outsourcing?
If a company is considering outsourcing, they
should have a good database /tool for guiding the
customer service work. Without our service system,
I don’t think that outsourcing would have been
possible. Even with our system, we noticed that
further development is needed so that the
customer service can provide comprehensive
service to our customers.
Appendix 2
1 (3)
Field Notes Interview 2 TOPIC: HR________________________________________
Information about the informant (Interview 2) Table 1
Details Supplier Company HR-Manager
Name of the informant Interviewee 2
Position in the case
company
HR-manager
Date of the interview 2.3.2016
Duration of the interview 43 min
Document Field notes
Field notes (Interview 2) Table 2
* Think of formulating your own questions; these are suggestions for you to start
Topic(s) of the
interview
QUESTIONS
FIELD NOTES
1 Experience Personal Background?
Your role in the company?
I have a HR degree from Hanken. I have
worked for several years in recruiting and
various HR roles in the past. I took a long
parenting leave from work and returned
when CEO told he needed a recruiting
person for a project with Aalto-university.
I did the recruiting for 7 years. I moved to
HR work about 5 years ago.
2 Background
Background of the case
project?
This particular service was considered
difficult service. First we started to check
if we have suitable people/team in-house
and we decide who would be the best
team leader for this particular customer
service. The client company did not have
any specific requirements for the team
members, so we were given free hands to
select suitable agents for the new service. If it turns out that we do not have enough
or suitable resources, we would need to
recruit new agents. Recruitment is done
Appendix 2
2 (3)
through various channels, mol.-website,
word-to-mouth and sometimes even
newspapers.
3 Project
Preparations
Preparing for the
Outsourcing
In this case we had a meeting with the
team leader, where she briefed me about
the new service. Then we discussed who
would be suitable to take the calls. The
client did not have any special requests
what kind of agent would be suited for
their service, but as we discussed this
with the team leader, it was clear that the
service is quite complicated and agents
need to be selected so that they can
handle the service.
3 Training for the
service How was the training
conducted?
After we had decided to do the service
with a current team, there was no need
for general customer service training, just
for the new client. If we had recruited
new people we would have started the
training by teaching telephone and other
tools as well as how to answer to a
service calls. The client held their own
product and service training. Most clients
are also willing to give additional training
if during the operations we notice that
agents need mere information to service
customers. 4 Implementation
and follow up
How is the quality of the
service ensured?
The team leaders know about the agreed
service levels. In the early discussions
with the client all quality criteria is
discussed and if the client is able to
describe what kind of service they want,
the team will try their best to produce that
service. The calls are monitored and
analyzed and the team leader discusses
findings with the agent.
Appendix 2
3 (3)
5 Analysis In which areas do you think
there is room for
improvement? In what
way? How could that be
done?
With this case project there was some
issues with training, so the team has
received now more training. If I could
suggest changes, I would invest more
time in continuous training for agents and
team leaders. It would be nice to grow
team leaders to their positions in- house
and that would require some form of
training program.
6 Best practice What things are done
better at Nesenta than in
other companies?
Our organizational structure is low and
our team leaders are really talented. They
are responsible for customer contacts,
client co-operation and team leading. I
think that the lack of hierarchy is good but
maybe more hierarchy is needed in the
future if we continue to grow as a
company.
7 Development
needs
How could the company
avoid the problems in case
of the next outsourcing?
I would like to focus on the continuous
training and maybe implementing
programs to create career paths for
talented team members to grow into team
leader roles as it is very difficult to recruit
team leaders suitable to our needs from
outside.
Appendix 3
1 (2)
Field Notes Interview 3
TOPIC: IT________________________________________
Information about the informant (Interview 3)
Details Supplier Company ICT Manager
Name of the informant Interviewee 3
Position in the case
company
ICT manager
Date of the interview 4.3.2016
Duration of the
interview
28 min
Document Field notes
Field notes (Interview 3)
Topic(s) of
the interview
QUESTIONS
FIELD NOTES
1 Experience Personal
Background?
Your role in the
company?
I have a master’s degree (technology) in Computer
science and I have worked 20 years in the field, now 8
years at Nesenta as ICT Manager.
2 Background
Background of the
case project? What
usually happens from
IT-perspective when
you get a new client?
I got into this project at a late stage, usually if it is a
simple small outsourcing the sales people inform the
client what information is needed and we get information
from then in the startup meeting. Especially in a more
complicated outsourcing it would be good to have the IT
involved in early stage as we need to know what kind of
systems will be used, do we need to open service
numbers and if we need to access servers, all firewall
openings need to be defined sometimes with several
vendors. During the tender phase, technology is often
missing from requirements, but it is very important to
have all technical elements defined and priced in the
contract. It is difficult to give a quote if we don’t know
what kind of CRM system or communication channels will
be used, or do we have the technology in-house or do
we need to buy it outside.
3 Project
Preparations
How did you prepare
for the Outsourcing
We usually have a startup meeting. In an optimal case
we have all vendors and client’s representatives from
business, service, HR and IT at the same table. Also if
the client has third-party service providers, it would be
Appendix 3
2 (2)
good to have their people along as well.
4
Implementati
on and follow
up
How is the quality of
the service defined?
We do the reporting according to customer’s wishes, but
if there are no specific requests we also have basic
reports available to all customer in our NESQ reporting
service.
5 Analysis In which areas do
you think there
would have been
room for
improvement in this
project? In what
way? How could that
be done?
In a case like this, IT involvement is not necessary from
the start, but it does help if we are involved as soon as
possible. In this case there was only one surprise; the
company wanted separate phone numbers for each local
office, which we did not know until just before go live
day. This caused some hassle.
6 Best practice What things are done
better at Nesenta
than in other
companies?
Our technology team is great, I think our team is very
good at vendor management and product development;
also our service system and reporting tools are really
good. Real time reporting makes it easier to maintain
good service levels
7 Development
needs
How could the
company avoid the
problems in case of
the next outsourcing?
I would like to see more proactive product development
options in the contact center / telephone system. And as
I said before, technology should be part of negotiations
already in early stages.
Appendix 4
1 (3)
Field Notes Interview 4 TOPIC: CEO Interview
Information about the informant (Interview 4) Details CEO
Name of the informant Interviewee 4
Position in the case
company
CEO
Date of the interview 23.3.2016
Duration of the interview 42 min
Document Field notes
Field notes (Interview 4) * Think of formulating your own questions; these are suggestions for you to start
Topic(s) of
the interview
QUESTIONS
FIELD NOTES
1 Experience Personal Background?
Your role in the
company?
I am the CEO of Nesenta. The company was based
on Sitra research done in 2002, before that I have
worked almost 20 years in various positions in
service branch.
2 Service
Tell me about this
customer service?
This was a quite special case. I was driving in my
car going home from a meeting, when I got a call
from the client. First I did not know what the man
on the phone was talking about because it had
been I while since we made the offer to the
company. But after talking for a while I
remembered and we agreed to meet. The person
on the phone was with one of the co-owners of the
client company. We met at a shopping mall and got
along well straight away so we agreed to meet at
our office. Company representatives came over and
we had a good discussion. They called me shortly
after. They had decided to choose us because they
felt that there was a good vibe in our office. I like
to ask this question from all our clients “why did
you choose us?”
3 Contract
negotiations
How were the contract
negotiations like?
The client didn’t have too many wishes when it
comes to contract. There is a basic minute pricing,
Appendix 4
2 (3)
as the calls are quite long in duration. Only request
was defining the queue time that had strategic
importance to the client. There was some
discussion about the training because there is such
versatility in the calls. We decided on the basic
reporting. It is completely different situation if you
are negotiating with a company that already has
experience in outsourcing then with a company
that does it for the first time. First time outsourcees
do not know anything about key performance
indicators or service levels, so we consult the client
and sometimes advice adding them to the contract
as it will make to monitoring of the service quality
easier. This contract does not have any sanctioning
or incentive clauses. The contract is continuous but
with only three months termination period, so there
is no need for specific exit clauses. There is no
need to ask clients to sign for fixed long period
because we have defined our pricing at a durable
level.
4 Implementati
on and follow
up
How is the service
collaboration
working?
I feel that this service is working really well
considering the complexity of the calls. Key
element is the system, the process is well
documented and system provides enough
information about the process and products. 5 Analysis In which areas do you
think there is room for
improvement?
We plan to implement all service descriptions and
manuals for training and back up service. The idea
is to have them as knowledge database in our
intranet so that all our personnel will have access
to them. Also we have created a new position;
Marika will monitor all resources and control
available resources according to the agent skills. 6 Best practice What things are done
well?
We are strong in three focus areas, service skills-
for example language-we service in Finnish,
Swedish and English and in the future we plan to
grow our expertize by adding more languages to
Appendix 4
3 (3)
our skills. Second we have all important service
channels in use- phone, email, chat etc. Finally our
technology is on high level- we can produce
reporting and service tools tailored to our
customer’s needs.
Appendix 5
2 (2)
Field Notes Interview 5 TOPIC: Service Agent interview
Information about the informant (Interview 5) Details Customer service agent
Name of the informant Interviewee 5
Position in the case
company
Agent
Date of the interview 30.3.2016
Duration of the interview 21 min
Document Field notes
Field notes (Interview 5) * Think of formulating your own questions; these are suggestions for you to start
Topic(s) of
the interview
QUESTIONS
FIELD NOTES
1 Experience Personal Background?
Your role in the
company?
I have worked in Nesenta over 10 years in different
customer service teams. I have been working in
customer service before, but then it was face-to-
face service.
2 Service
Tell me about this
customer service?
The service came to our team a couple of years
ago from another team. They have a really good
system where customer information is stored. If we
can’t do what the customer asks then we send
customer information to the main office as call
back by email. We can do all basic maintenance
request scheduling and offers for apartment
buildings, but all houses that are bigger than 500
square meters go for the main office for service
offer calculation.
3 Training for
the service How was the
training conducted?
The training was done in two parts, first the system
and how different customer calls will be solved
then we took calls for a while and then we had
additional training. We had a consultant from the
company in the beginning of this year and he has
been listening our calls and given good advice.
4 Implementati
on and
How is the quality of
the service ensured? There are just normal service levels for the
answering the calls. The consultant listened to our
Appendix 5
3 (2)
follow- up
feedback and he got service levels for the main
office callbacks, is so much better to tell the
customer when they should expect the call, it is
just better service. He also gave some good advice
on how to answer the calls and explained both
company perspectives. We got more training for
the products and invoicing matters are also
handled faster now. 5 Analysis In which areas do you
think there is room for
improvement?
At the moment everything is working well, but
before the consultant came, we had some
problems, luckily he listened our feedback and they
have made the process much better. I was really
happy that they heard us and did the
improvements we suggested. 6 Best practice What things are done
well in this service?
The system is the best I have worked with, it has a
lot of information and it is easy to use.
Appendix 6
2 (2)
Field Notes Interview 6 TOPIC: Team Leader
Information about the informant (Interview 6) Details Supplier Company Team Leader
Name (code) of the
informant
Interviewee 6
Position in the case
company
Team leader
Date of the interview 31.3.2016
Duration of the interview 39 min
Document Field notes
Field notes (Interview 6) Topic of the
interview
QUESTIONS
FIELD NOTES
1 Experience Personal Background?
Your role in the
company?
I have worked for 11, 5 years for Nesenta, but
altogether I have over 20 years’ experience on
customer service work for different companies.
2 Background
Describe the service?
The service is quite different from anything else I
have worked with; closest to this was maybe
Uponor waste water info service. We were taught
about the process of cleaning by a video that
shows how it is done but there a so many
structural differences. Some customers ask if they
could speak to a man about the job. I sometimes
think that it might be better to have some man
taking the calls, because I have never done air-
conditioning maintenance myself. It might be
helpful to go along with the maintenance people to
see how it is really done. The calls are usually
about maintenance scheduling and offer for air-
conditioning pipes and filters and flues.
3 Training for
the service How was the
training conducted?
The company representative gives initial training.
We looked at a video on how the maintenance is
done and we got training to the system. Then we
took calls for couple of weeks and the he came to
Appendix 6
3 (2)
give us additional training.
4 Implementati
on and follow
up
How is the quality of
the service ensured?
They have a service level on 80%/20 sec, but there
are only 5-10 calls a day. The consultant
implemented a service level for the callback we
sent to the main office, 5 Analysis In which areas do you
think there is room for
improvement? In what
way? How could that
be done?
The consultant that has been helping us with this
service has done a lot of improvements. It is so
nice that he actually listened to us and has done
many improvements on the service. We can now
follow the status of a project and tell that to the
customers on the phone. Customers can follow up
on their projects status online, so they see the
same thing as we do in the customer service. Also
having the response time to the callbacks is very
good improvement, customers are so much happier
when they know they will get the callback.
6 Best practice Can you suggest so
improvements?
Before the consultant cam there were some issues,
but most of them are already solved, so for now I
don’t have any suggestions for improvements. The
co-operation with this client is very uncomplicated
and good and they really listen to what we think.
Appendix 7
2 (1)
Comments on the Outsourcing Process Supplier ITC-Manager
Tender phase
-Service channels phone, email, chat etc.
-Clients own programs; phones and service system
-Is VOIP-integration needed?
Start-Up meeting
-Call and email routing
-Firewalls, serve and VPN-connections
-Business Analytics
-Supplier contacting if service cannot be done with own resources
-Planning transition, timeline, testing, roles & responsibilities
Day-to-Day operations
-Reporting according to service agreement
-Service stabilization and adjusting
-Knowledge transfer between units, mail-lists, instant messaging, service system
Appendix 8
2 (1)
Comments on the Outsourcing Process Supplier HR-Manager
Start-Up meeting
-Service team, are resources available, is recruiting needed
-what is the agent profile
-who has the most suitable resources in the team
-Training roles & responsibilities
-Timeline for implementation
Training just before the launch, for maximum knowledge retention
Day-to-Day operations
-Additional training if needed
-Support from the client company
-Knowledge transfer between units, weekly operational meetings
-Continuous service development
-Additional person to supervise team resourcing